Korea resumes applications for third internet-only bank

Rejected applicants Toss Bank and Kiwoom Securities are welcome to re-apply.

The Financial Services Commission (FSC) announced plans to resuming applications for the country’s third virtual bank operator after payment service Toss and Kiwoom Securities failed to secure regulatory approval, reports The Korea Herald.

The feasible timeline to resume applications may start on October which will give applicants an additional month of preparation. The regulator may aim to grant a preliminary license to one or more successful applicants by end-2019.

FSC Chairman Choi Jong-ku told reporters that FSC has duly informed Viva Republica and Kiwoom of why their applications have been denied. “Should they reapply this time, the FSC will give them sufficient time to make up (for their earlier shortcomings),” Choi said.

Also read: Korean virtual banks still struggling to crack the profitability code

Toss Bank had revealed that it would kickstart operations with a capital base of $212m (KRW250b) which it plans to increase to $1.02b (KRW1.2t) in three years. This triggered skepticism from the regulator as the firm recorded a net loss of $38m (KRW44.5b) for fiscal year 2018. The consortium was also advised to fix its shareholding structure that became heavily reliant on main player Viva Republica after Shinhan Financial Group’s withdrawal.

Meanwhile, Kiwoom Bank was rejected for the lack of innovative factors and detailed specifications on the business plan.