Shares of South Korea’s Kakao Bank soar almost 80% in its commercial debut

Kakao Bank’s shares soared nearly 80% during its debut in the South Korean market on Friday.

Kakao Bank is South Korea’s first publicly traded digital bank and is the country’s largest IPO since 2017, when Netmarble went public.

By the end of South Korea’s trading day on Friday, Kakao Bank’s stock had risen 78.97% from its issue price.

The gains for Kakao Bank came amid increased pressure in South Korean markets, which saw the Kospi drop around 0.2% on the day. Shares affiliated with Kakao Bank also fell, with both Kakao Corp. and Kakao Games falling more than 2% each.

The public listing made Kakao Bank the most valued financial firm in South Korea by market capitalization, according to local news agency Yonhap News.

In an exclusive interview with CNBC, Kakao Bank CEO Yun Ho-young dismissed concerns about whether the IPO was overvalued.

“I think the IPO price is largely set by the market, Kakao Bank is a bank in the mobile age,” he said.

“We are different from existing banks and we are creating new market opportunities,” he added. “One million customers opened their mobile bank account with Kakao Bank in just five days after launch. Based on these figures, don’t you think Kakao Bank is certainly different from traditional banks? “

Kakao Corporation holds a 31.62% stake in Kakao Bank as a majority shareholder, according to the bank’s IPO statement in August. It became profitable in 2019, just two years after launching its service in 2017.

Yun said the bank hopes to expand beyond South Korea after its listing.

Before its public debut, some global companies had approached the digital lender to seek partnerships, Yun said.

“At that time, we prioritized focusing on domestic events and we had capital constraints to pursue global expansion,” he said. “However, after the IPO, we will actively seek global opportunities.”

On the firm’s future plans, as it seeks to fend off competition from incumbents, Yun said it includes an initial expansion in the mortgage loan business for its banking services sector. Currently, Kakao Bank has 13 million monthly active users, according to Yun.

– CNBC Chery kang contributed to this report.

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