Tiếng ViệtDGB Daegu Bank is embarking on a new chapter as a commercial bank, 56 years after its launch as a regional bank. It is the first new commercial bank to be launched in 32 years, following the now-defunct Peace Bank of Korea in 1992.
The Financial Services Commission (FSC) on Thursday held a regular meeting and approved DGB Daegu Bank’s transition from a regional bank to a commercial one, three months after the bank filed its application.
“With the bank’s transition to a commercial bank, competition among banks is expected to increase in the newly entered business areas, potentially enhancing consumer choice,” the FSC said in its statement.
“Over the next three years, the bank plans to establish 14 new branches in Seoul, the Chungcheong provinces and Gangwon Province, improving financial accessibility for consumers in these areas.”
This decision is based on the financial authorities’ intent to break the oligopolistic banking industry by introducing new players. Among regional banks, DGB Daegu Bank was the only one that met the legal conditions allowing it to transition into a commercial bank.
There were concerns that a financial incident involving the illegal opening of securities accounts at the bank’s branches might hinder its transition. However, after thorough investigations, the authorities concluded that the bank has implemented various tailored preventive measures.
Following the approval, the bank will change its name to iMBank in June. Its headquarters will remain in Daegu.
The bank plans to enhance customer accessibility and reduce costs by upgrading its own non-face-to-face channels, such as its application, and expanding partnerships with external platforms. This will allow them to offer various low-interest products to consumers.
Furthermore, leveraging its accumulated know-how as a regional bank and its risk management capabilities, the bank plans to increase credit offerings to small and medium-sized enterprises with medium credit, as well as to individual business owners.
The bank will also continue its efforts to revitalize the regional economy by expanding business loans in Daegu and North Gyeongsang Province.
However, the bank’s ability to foster competition in the oligopolistic industry remains questionable.
This skepticism arises because of the significant difference in scale compared to the existing major commercial banks. Additionally, the bank lacks differentiation from other medium-sized banks, including internet-only banks that outperformed regional banks in profits during the first quarter of this year.
“Differentiation is key to DGB Daegu Bank’s future success,” a market insider said.
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