Internet Banks See Surge in Overseas Assets as Toss and Kakao Expand Investments

Kakao Bank and Super Bank employees pose for a commemorative photo at the Super Bank listing ceremony at the Indonesia Stock Exchange in Jakarta. [Photo=Kakao Bank]

Internet-only banks are rapidly increasing their overseas assets. While Toss Bank focuses on managing increased foreign currency in international financial markets, Kakao Bank is expanding its overseas operations through strategic investments.

As of the end of March this year, Toss Bank's overseas asset management totaled $210 million, more than quadrupling from $50 million during the same period last year.

By country, loans in Japan rose from $30 million to $81 million, while loans in Singapore surged from $20 million to $120 million. The reported loans include short-term funding for financial institutions and interbank transactions that arose during the management of foreign currency liquidity.

Toss Bank explained that it is managing profitability and liquidity by operating the increased dollars in overseas financial markets such as Japan and Singapore, where the dollar and foreign currency management markets are well developed in Asia.

Kakao Bank's increase in overseas assets is attributed to the rising value of its foreign investments. As of the end of March this year, Kakao Bank's overseas managed assets reached $157 million, more than double the $76 million reported a year earlier. Of this, $147 million was in Indonesian securities, with the remainder consisting of investments in U.S. Treasury bonds and other asset management purposes.

The increase in Kakao Bank's Indonesian securities reflects the success of its investment in the local digital bank, Super Bank. Kakao Bank invested a total of 114 billion won in Super Bank in two rounds in 2023 and 2024. Following Super Bank's listing on the Indonesia Stock Exchange (IDX) at the end of last year, the value of its holdings increased.

Kakao Bank is taking the most aggressive approach among internet-only banks in expanding overseas. Last year, it obtained a virtual banking license in Thailand through a consortium that included Thai financial holding company SCBX and plans to become the second-largest shareholder in the upcoming virtual bank. Recently, it signed a memorandum of understanding (MOU) with MCS Group, Mongolia's largest company, to pursue investment and business cooperation with the local digital bank, M Bank, thus extending its reach beyond Southeast Asia into Central Asia.

In contrast, K Bank and Toss Bank have yet to solidify their plans for entering overseas markets, focusing instead on strengthening their positions in the domestic market.

An industry insider noted, "While Kakao Bank is concentrating on securing new growth engines in overseas markets, K Bank and Toss Bank are still prioritizing their domestic market strategies and enhancing their core competitiveness."

* This article has been translated by AI.

Lee Seongjin