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Elon Musk's bitcoin support boosting K bank

K bank headquarters in Seoul / Yonhap
K bank headquarters in Seoul / Yonhap

By Lee Min-hyung

K bank is enjoying the benefits from its partnership with Upbit, a Seoul-based digital currency exchange, after Tesla CEO Elon Musk expressed his interest in Dogecoin. Upbit is the only exchange here trading the meme-based cryptocurrency.

The internet-only lender resumed its business in July 2020 after suffering years of capital erosion. The bank has since engaged in a series of aggressive marketing activities to regain the spotlight as the nation's first mobile bank.

Until recently, market watchers said the lender's identity looked vague despite such efforts, with some sharing skepticism over its sustainability. Kakao Bank, a dominant leader in the market, has also been posing a threat to K bank's business expansion here. Major revenue streams overlap between the two banks. Kakao Bank secured more than 13.6 million customers, while K bank falls far short of that figure as of the end of 2020.

But K bank has been drawing unprecedented attention lately from investors and customers here by attracting more than 1 million customers in only about two months after the Tesla leader recently expressed his optimism on the cryptocurrency. It took two years for the lender to attract the number of customers since its establishment in 2017.

Under the partnership between K bank and Upbit, those who plan to invest in the digital asset should open an account of the lender. Following Musk's remark over the cryptocurrency, Upbit and K bank placed their names on the top two most popular apps lists on Google Play Store and Apple App Store here.

Industry sources expected the cryptocurrency craze here and abroad to continue at least for the next few months unless financial authorities slap abrupt sanctions against its trading.

"K bank's strategy to jump on the untapped and promising digital asset market appears to be bearing fruit, and this will play a crucial part in enhancing its brand identity as the internet-driven financial player," a bank industry source said.

The lender plans to raise 600 billion won ($534.56 million) from investors here and abroad this year, as part of its efforts to increase capital before a planned initial public offering (IPO) sometime as early as 2022. Toward that end, K bank is advised to keep increasing its influence in the market by rebuilding its brand identity in a differentiated manner, according to the source.

"A revenue structure of mobile lenders is not that risky, as they focus on generating profits from the loan-to-deposit margin, and do not engage in a wider and complex range of businesses unlike other big commercial lenders here. K bank may be able to generate stable revenues if it keeps paying attention to risk management for the next few years," another source said.

Lee Min-hyung mhlee@koreatimes.co.kr


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