The largest financial company in Thailand, SCBX, has reiterated its dedication to the digital banking alliance with Kakao Bank in spite of the mounting legal concerns pertaining to Kakao Corp., the Korean internet-only bank’s primary shareholder.
Key Kakao enterprises, including Kakao Bank, were put under uncertainty after Kim Beom-su, the founder and chief decision-maker of Kakao Corp., was detained on July 23 on suspicion of manipulating shares in connection with the IT giant’s acquisition of K-pop juggernaut SM Entertainment the previous year.
Siam Commercial Bank, the top lender in Thailand, is owned by SCBX, which is a crucialally of Kakao Bank in its aggressive Southeast Asian growth.
The local authorities have begun taking applications for the three operating licenses, with virtual banking services expected to launch in Thailand in 2026. A consortium managed by SCBX is thought to be among the strongest contenders. The two main players in the partnership are Kakao Bank and WeBank, the top online lender in China.
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The Korean company hopes to acquire at least 20% of the shares in the future virtual bank, with the review process expected to be finished by the first half of 2019.
“We do not foresee any changes to our current business relationship (with Kakao Bank) based on the recent news,” SCBX’s Chief Customer Officer Sutirapan Sakkawatra told The Korea Herald via email, regarding the impact of Kakao’s legal developments.
After Kim’s indictment, Kakao Corp.’s legal issues have raised questions regarding Kakao Bank’s global relationship.
If Kim is found guilty and receives more than a fine, Kakao Corp., which Kim represents, might lose its banking arm majority ownership status. The excess from its 27.6% share in Kakao Bank would have to be sold since local Internet banking rules prevent anyone convicted of a financial crime in the prior five years from holding more than 10%.
Despite its legal issues, industry insiders expect local financial regulators to allow Kakao Bank’s entry into Thailand, which would be the first South Korean lender to do so in almost three decades.
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If Kakao Bank gets the license, it would be a big deal for the corporation and the Korean government as they strive to repair their financial relationship. This proposal will undoubtedly receive government support “anonymous industry source claimed. The 1997 financial crisis forced all Korean banks out of Thailand, and none have returned since.
The insider noted that Kakao Bank’s status as Korea’s first internet-only bank doing global business cannot be ignored by the government. Kakao Bank is a key shareholder in Indonesia’s June-launched digital bank Superbank.
About SCBX
SCBX develops and implements strategic initiatives, focusing on financial institutions and digital technology. This covers new business, M&A, strategic investments, collaborations, and divestitures.
About Kakao Bank
KakaoBank Corp. provides mobile banking and financial technology in South Korea. Kakao Corp. and Korea Investment Holdings formed it in 2016.
