Kakao Bank Signs Joint Venture Agreement with SCBX to Establish a Virtual Bank in Thailand

Yoon Hoyoung: "Laying the Foundation for New Market Expansion... Showcasing the Excellence of K-Finance"

On the 21st, Yoon Ho-young, CEO of Kakao Bank (left), and Arthid Nanthawithaya, CEO of SCBX, are posing for a commemorative photo at the "Joint Venture Agreement Signing Ceremony for the Establishment of a Virtual Bank in Thailand" held in Bangkok, Thailand. Provided by Kakao Bank

Kakao Bank announced on the 22nd that it has signed a Joint Venture Agreement (JVA) with SCBX, a Thai financial holding company, to establish a virtual bank. Through this agreement, the two companies will set up a joint venture.

The signing ceremony for the joint venture agreement was held at 3 p.m. local time the previous day in Bangkok, Thailand, with Arthid Nanthawithaya, CEO of SCBX, and Yoon Ho-young, CEO of Kakao Bank, in attendance.

The "virtual bank" being introduced by the Bank of Thailand (BOT) is a form of financial service provided exclusively through digital platforms without any offline branches, similar to internet-only banks in Korea. Currently, Thailand is experiencing rapid digital transformation, with a smartphone penetration rate exceeding 90% and widespread adoption of the real-time payment system "PromptPay." However, tens of millions of people are still classified as "underbanked," meaning they do not receive sufficient financial benefits. The virtual bank to be established by Kakao Bank and SCBX plans to provide mobile financial services to these individuals.

Kakao Bank will initially acquire a 10% stake in the joint venture, and plans to gradually increase its shareholding to 24.5%, thereby solidifying its position as the second-largest shareholder. Kakao Bank will oversee all aspects of frontend development, including user interface (UI) and user experience (UX) planning, as well as the construction of the mobile app. WeBank Technology Service, a subsidiary of China's WeBank, will also participate as a technology partner.

The virtual bank is expected to officially commence operations after a period of system development and preparation. The specific launch schedule will be determined upon approval from the Bank of Thailand. Kakao Bank plans to use this as a springboard to expand its presence not only in Southeast Asia but also in other regions, and aims to broaden its business scope beyond simple equity investment and knowledge transfer to lead the "establishment of mobile financial systems."

Kakao Bank's entry into Thailand is significant as it represents the expansion of a business model that succeeded in Indonesia. "Superbank," the Indonesian digital bank in which Kakao Bank made its first global investment, has rapidly surpassed 5 million customers in a short period and recently succeeded in listing on the local market. Kakao Bank intends to localize and apply this expertise to the Thai market.

CEO Yoon stated, "Our entry into Thailand is a symbolic achievement, as it marks the first time in 25 years since the Asian financial crisis that a Korean bank has re-entered the Thai market. Based on the excellence of Korea's digital finance, we will establish a successful virtual bank model and lay the foundation for expanding into the global market."