Wed, Jan 30, 2019 - Page 11 News List

KGI Bank to buy 7% stake in online-only Next Bank

By Kao Shih-ching  /  Staff reporter

KGI Bank (凱基銀行), a subsidiary of China Development Financial Holding Corp (中華開發金控), on Monday announced that its board of directors has approved an investment of NT$700 million (US$22.7 million) for a 7 percent stake in Next Bank (將來銀行), a planned Web-only bank led by Chunghwa Telecom Co (中華電信) and its partners.

KGI would be one of three financial institutions to have a stake in Next Bank.

Mega International Commercial Bank (兆豐銀行) and Shin Kong Life Insurance Co (新光人壽) earlier this month announced that they would invest NT$2.51 billion and NT$1 billion for a 25.1 percent stake and a 10 percent stake respectively in the Web-only bank.

Shin Kong Financial Holding Co (新光金控), the parent company of Shin Kong Life, last week said that investing in Next Bank could help it build new marketing channels, save on the high operating costs of conventional branches, expand its business ecosystem and develop new business models.

Shin Kong Financial also aims to target young customers, as foreign surveys have shown that people younger than 35 constitute 80 percent of Internet banks’ clientele in overseas markets.

Local Chinese-language media have reported that DBS Bank Ltd (星展銀行) and Citibank Taiwan Ltd (台灣花旗) are also interested in investing in Next Bank.

Both declined to comment.

EasyCard Corp (悠遊卡) has not finalized its investment in Next Bank, although former chairman Kenneth Lin (林向愷) last year said that it would invest between NT$300 million and NT$500 million in the Web-only lender.

Supermarket chain operator Pxmart Co Ltd (全聯實業) has also remained silent on the size of its planned investment in Next Bank.

The Financial Supervisory Commission is to issue two licenses for Web-only banking services this year. Next Bank is expected to compete with two potential rivals: Line Financial Taiwan Corp’s (台灣連線金融科技) Line Bank and a team led by Waterland Financial Holdings Co (國票金控) and Japanese e-commerce firm Rakuten Inc.

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