Amid the Spread of Non-Face-to-Face Services and the Debt Investment Craze, K-Bank and K-Bank's November Credit Loans Soar to 1 Trillion Won

KakaoBank Increases by 550 Billion, KBank by 420 Billion
Massive Absorption of Young Generation Demand Amid Regulatory Tightening Analysis

[Asia Economy Reporter Kim Hyo-jin] Internet-only banks KakaoBank and K Bank saw their credit loans surge by nearly 1 trillion won last month.

This is analyzed as a result of demand being significantly diverted to these banks, which emphasize the convenience of non-face-to-face methods, amid tightening regulations on credit loans by financial authorities targeting commercial banks. The increase in demand for loans for stock investment by younger generations, so-called 'debt investment (bit-tu)', is also considered to have influenced this trend.

According to the banking sector on the 7th, KakaoBank's credit loan balance at the end of last month was 15.7502 trillion won, up 555.3 billion won from 15.1949 trillion won at the end of October. The increase in KakaoBank's credit loans last month was nearly three times the increase in September (213 billion won) and more than double that of October (242.7 billion won), marking the second highest increase this year and the highest in the second half.

For K Bank, the total loan balance at the end of last month was 2.71 trillion won, up 420 billion won from 2.29 trillion won at the end of October. Most of K Bank's total loans consist of credit loans. After the increase slowed from 350 billion won in August and 330 billion won in September to 180 billion won in October, it surged again significantly last month, marking the largest increase this year. The combined increase in credit loans for the two banks last month was approximately 970 billion won.

A banking sector official explained this trend by saying, "It appears to reflect the continuous inflow of younger customers who prefer non-face-to-face methods and have a relatively weak sense of a main bank relationship to internet-only banks."

Impact of Debt Investment Loan Demand and Strengthened Marketing

There is also a view that the demand has greatly expanded due to the tendency of young people to take out loans to jump into the rising stock market and the banks' marketing efforts. According to the Financial Supervisory Service's analysis, as of the end of August, the cumulative number of securities accounts at securities firms was 71.34 million, an increase of 10.69 million compared to the end of last year, with 2.46 million accounts held by people in their 20s.

NH Investment & Securities analyzed its customer accounts and found that stock accounts held by people in their 20s increased by 186% compared to the beginning of the year (as of the end of October). KakaoBank operates a 'Stock Account Opening Application Service' linked with NH Investment & Securities, Korea Investment & Securities, and KB Securities. K Bank is also focusing on attracting young customers by offering events such as lending part of the subscription deposit for general investors and providing interest cashback.

The financial authorities view the increase in credit loans at internet banks as overheated and are taking steps to manage it. Accordingly, last week, the financial authorities summoned executives in charge of loans at commercial banks and KakaoBank to check the management status of credit loans.

In September, KakaoBank raised the minimum interest rate on employee credit loans from 2.01% per annum to 2.16% per annum, an increase of 0.15 percentage points. At the end of last month, in line with strengthened regulations on high-income borrowers' credit loans, KakaoBank raised the loan interest rates for high-credit borrowers on employee credit loans and overdraft loans by 0.10 percentage points and 0.25 percentage points, respectively. K Bank is also reportedly reviewing management measures such as raising interest rates on some credit loan products.

This content was produced with the assistance of AI translation services.