December 06, 2019

Toss needs new investors to reapply for 3rd internet bank: FSC

PUBLISHED : June 09, 2019 - 16:15

UPDATED : June 09, 2019 - 16:16

  • 본문폰트 작게
  • 본문폰트 크게
  • 페이스북
  • 트위터
  • sms

Weeks following the Korean financial regulator’s rejection of its request to set up the nation’s third and fourth internet-only banks, Toss Bank may have to draw up a fresh list of strategic investors to get a second shot.    

The Financial Services Commission on June 9 pointed out issues with Toss Bank’s shareholding structure and lack of a feasible plan to raise capital as key reasons behind its decision to reject the application.

In a shocking turn of events, the FSC on May 26 refused to issue new operational licenses for both contenders for internet-only banks -- the Toss Bank consortium led by Viva Republica, operator of popular money transfer and payment platform Toss, and Kiwoom Bank, led by local brokerage Kiwoom Securities.

“Toss Bank offered a plan to raise capital focused on a limited pool of financial investors in its last request, despite its state of unstable capital structure,” a FSC official said.

“If the consortium fails to fix this, we cannot issue the license even if they come up with a great plan,” the official added. 


Toss Bank stated in its submitted plan that it would start with 250 billion won ($212 million) in capital and raise that up to 1.2 trillion won in three years, on which the FSC expressed skepticism considering Toss’ recorded net loss of 44.5 billion won for fiscal 2018.

The FSC also took issue with Toss Bank’s shareholding structure that placed Viva Republica as majority shareholder with 60.8 percent stake, followed by Korean strategic holders with a combined 19.9 percent stake and foreign venture capital firms owning 19.3 percent stake.

The structure -- which critics saw as “unstable” -- was the result of Shinhan Financial Group’s decision to withdraw from the consortium, feeding doubts about its capability to manage actual accounts.

Critics have also pointed out Toss Bank’s lack of a contingency plan for capital management after investors pull out upon profit-taking.

Meanwhile, Kiwoom Bank, which was rejected for its plan’s “lack of feasibility and innovation” seemingly faces fewer hurdles than Toss. It also boasts strong partners, including the nation’s leading mobile carrier SK Telecom and 11st, a top e-commerce operator.

Toss has yet to confirm its participation in the next competition, but has reportedly been reviewing the rejected plan while “assessing the situation.”

The FSC will receive applications to establish online banks sometime during the third quarter of this year, with the outcome of the review expected in the final quarter of 2019.

There are only two players in the online-only banking market – K bank and Kakao Bank. Both were launched in 2017 and have been reshaping Korea’s banking market to become more tech-savvy and mobile-centered.

By Jung Min-kyung / The Korea Herald (

  • 페이스북
  • 트위터
  • sms
Herald Corporation|CEO : Kwon Chung Won
Publisher. Editor : Kwon Chung Won
Chief Privacy Officer & Juvenile Protection Manager : Yang Sung-jin
Title : The Investor|Date of registration : 2015.04.28
Company Registration No. 104-81-06004
Mail-Order Business Registration 2016 - Seoul Yongsan - 00590
Huam-ro 4-gil 10, Yongsan-gu, Seoul, Korea
T : +82-2-727-0114|Business info
Gov’t registration No. Seoul 아04099