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December 09, 2019

Korea Investment Holdings to climb down to Kakao Bank minority shareholder

PUBLISHED : November 19, 2019 - 20:37

UPDATED : November 19, 2019 - 20:45

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Seoul-based Korea Investment Holdings plans to transfer its stake in South Korea’s leading neobank, Kakao Bank, to its subsidiary Korea Investment Value Asset Management and internet giant Kakao, the company said in regulatory filings on Nov. 19.

The investment bank-led financial group’s holding entity will divest 57.6 million common shares in Kakao Bank, or a 16 percent stake, to the lender’s de facto parent company by Nov. 22, according to the plan. Also, a 29 percent stake in the lender, or 104.4 million shares, will be handed over to Korea Investment Value Asset Management, an indirect subsidiary. One more share will go to Yes24, another Kakao Bank shareholder.

The total shares in the deals were valued at a combined 489.5 billion won ($419.3 million).

Following the transactions, Kakao will become the largest shareholder of the neobank -- a commercial lender without brick-and-mortar branches -- with a stake of 34 percent, followed by Korea Investment Value Asset Management. Korea Investment Holdings’ ownership in the bank will reduce to 5 percent minus a share, from the 50 percent where it now stands.

This comes as Korea Investment Holdings looks to retire from being a banking entity stakeholder, while Kakao Bank aims to raise more capital to secure a capital buffer. In doing so, Korea Investment Holdings as a financial firm is barred from owning more than 5 percent of nonaffiliate companies.

Meanwhile, Korea Investment Holdings on the same day announced plans to raise 484 billion won for Korea Investment Value Asset Management and 777 billion won for its securities brokerage arm Korea Investment & Securities, both by Nov. 21.

The deals are awaiting the approval of the Financial Services Commission.

By Son Ji-hyoung (consnow@heraldcorp.com)

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