The application for preliminary approval of the 4th Internet specialized bank began on the 25th. With two strong candidates withdrawing or postponing their applications a week before the submission, the atmosphere is solidifying for the 'Korea SOHO Bank', led by Korea Credit Data (KCD). It is evaluated that an unprecedented three commercial banks are participating in the SOHO Bank consortium, and with LG CNS also joining, it has secured a robust shareholder competitive advantage. Although it is virtually the sole candidate, the decision on approval will be made through 'absolute evaluation', so attention is focused on whether the SOHO Bank can pass the financial authorities' threshold.
Starting from this day until the 26th, the Financial Services Commission will accept applications for preliminary approval of Internet banks for two days. The Financial Services Commission plans to conduct evaluations by a private external evaluation committee and reviews by the Financial Supervisory Service over the next 2 to 3 months, before deciding on the preliminary approval at a regular meeting. A spokesperson from the SOHO Bank consortium noted, "We plan to visit the Financial Services Commission on the 26th to submit the preliminary approval documents in person."
So far, the consortia that have expressed their intention to apply for preliminary approval include four entities: SOHO Bank, Soso Bank, AMZ Bank, and Grape Bank. Among them, the consortium considered the most promising is SOHO Bank. Currently, three commercial banks—Woori Bank, NH Nonghyup Bank, and Hana Bank—have joined SOHO Bank. Additionally, BNK Busan Bank, OK Savings Bank, Eugene Securities, and Woori Card are also participating, diversifying the shareholder composition with local banks, savings banks, securities firms, and card companies. A total of seven financial corporations are participating as shareholders, which is evaluated to have secured an overwhelming competitive advantage in shareholder composition. Furthermore, LG CNS, a specialized IT service company, officially confirmed its participation in SOHO Bank today. Aside from these, MegaZone Cloud (cloud management service) and ITCEN (IT service) are also participating.
KCD's strength lies in its possession of the largest data on small businesses in the country. KCD operates a management service called 'Cash Note', used by 1.7 million small business owners nationwide, which supports small businesses in revenue and expense analysis as well as credit score management. The transaction amount analyzed by KCD annually through Cash Note reaches 522 trillion won. KCD has also established a credit rating agency called 'Korea Evaluation Information' and has already provided credit rating models to several financial institutions based on the business operational data of small businesses.
There is a prevailing evaluation that SOHO Bank possesses competitiveness as an Internet bank that can supply funds to small and medium-sized enterprises and small businesses, as emphasized by the financial authorities. The key issues are 'capital strength' and 'inclusiveness.' The Financial Services Commission raised the scoring for the sections on 'capital and funding methods' and 'inclusiveness (business plan)' by 50 points each compared to the previous year when it announced the 'Key evaluation items and scoring for Internet bank preliminary approval' in November of last year.
Particularly emphasized is the capital strength of the major shareholder. KCD, as the main shareholder, needs to be able to raise several hundred billion won within a few years to increase its capital to around 2 trillion won without 'diluting its equity'; whether KCD has this capacity remains uncertain. According to the consolidated audit report for 2023 filed by KCD with the FSS electronic disclosure system, the net loss for the year was 119.5 billion won. While like Toss Bank, they can attract investment funds and inject capital, there is also potential for complications in that process.
It is also important to strengthen the business plan aimed at the 'supply of loans to small and medium-sized enterprises outside the metropolitan area' and 'contribution to local finance' to receive high points in the inclusiveness section. To this end, KCD is accelerating the signing of business agreements to expand cooperation with regional credit guarantee foundations that provide policy guarantees to small businesses this year. Busan Bank, participating in the consortium, has also revealed plans for developing financial products aimed at small businesses in Busan, linked to Cash Note.
A financial authority official noted, "It is true that SOHO Bank has a strong position, but it is also difficult to see it as a certain pass. Since the evaluation by the financial authorities is absolute, if there are items that fall below the criteria, they may outright deny approval." He added, "Recent discussions about the approval being pushed to the next administration may also cause anxiety for the SOHO Bank consortium."