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(LEAD) K-Bank raises deposit rate to fend off Kakao Bank

2017/08/09 21:33

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SEOUL, Aug. 9 (Yonhap) -- K-Bank, South Korea's first Internet-only bank, said Wednesday it has raised its deposit rate in an apparent bid to fend off its competitor Kakao Bank.

K-Bank increased the rate it offers on a 1-year time deposit by 10 bps to 2.1 percent, compared with 2 percent offered by Kakao Bank.

The rate hike came as Kakao Bank has far outpaced the growth of K-Bank in terms of customer base and loans.

K-Bank, which began formal operations April 3, has attracted about 440,000 customers and made loans worth 630 billion won (US$558 million).

In comparison, Kakao Bank's number of accounts exceeded 2 million, and it has made loans worth 770 billion won just 13 days since launching operations.

K-Bank is led by KT Corp., the nation's biggest fixed-line Internet operator, while Kakao Bank is led by Kakao Corp., operator of the nation's dominant messaging app KakaoTalk.

Meanwhile, Kakao Bank and K-Bank are seeking to raise their capital base as lending has grown at a faster-than-expected pace.

"We are reviewing an option to sell more stocks," said an official at Kakao Bank asking not to be named.

As of Tuesday, Kakao Bank's loans stood at 770 billion won, while its deposits reached 996 billion won. Kakao Bank's capital base is 300 billion won, and the corresponding figure for K-Bank is 250 billion won.