Kakao Bank and Samsung Life Also Reach Loan Threshold... Considering Limit Reductions and Interest Rate Increases

Insurance Industry Holds Emergency Meeting to Curb Loans

[Asia Economy Reporters Sunmi Park and Hyungil Oh] As financial institutions such as KakaoBank and Samsung Life Insurance approach their lending limits, they are stepping up efforts to manage total loan volumes, intensifying the 'money drought' for ordinary citizens. These financial institutions are actively considering measures to reduce loans or raise interest rates. As the ripple effects of loan restrictions and suspensions initiated by NongHyup Bank spread, financial authorities have moved to contain the situation, but the market is witnessing a real loan cliff.

According to the financial sector on the 24th, KakaoBank's household loan balance as of the end of June stood at 23.1265 trillion KRW, an increase of 2.8133 trillion KRW from 20.3132 trillion KRW at the end of last year. In terms of growth rate, this is 13.8%, the highest level in the financial industry. This is more than double the annual household loan growth target of 5-6% applied by financial authorities to commercial banks and significantly exceeds the 7.1% growth rate of NH NongHyup Bank, which decided to completely halt new mortgage loans due to surpassing its target.

Samsung Life Insurance also saw its household loan bonds reach 39.6012 trillion KRW as of the end of June, up 1.6625 trillion KRW (4.4%) from the end of last year. This exceeds the annual household loan growth target of 4.1% agreed upon by financial authorities and the insurance industry. Samsung Life accounted for half of the 3.4 trillion KRW increase in household loans across the insurance industry in the first half of the year.

With financial authorities tightening management, KakaoBank is considering reducing personal credit loan limits for high-credit borrowers, even if it does not completely halt lending. This is based on the judgment that reducing loan limits for high-credit borrowers is inevitable to expand mid-interest rate loans in line with the financial authorities' emphasis on policies to include financially marginalized groups.

Samsung Life Insurance, which has a higher proportion of mortgage loans compared to other companies and has reached its lending limit, is also contemplating measures to meet its total loan volume target by August. The market anticipates measures such as raising the threshold for new loans and reducing preferential interest rates.

Meanwhile, on the same day, the Life Insurance and Non-Life Insurance Associations urgently convened their member companies for a non-face-to-face video conference on household loans, urging insurance companies to join efforts to curb household debt. An insurance industry official said, "We discussed requests such as managing total loan volume targets conveyed by financial authorities," adding, "We asked for maximum cooperation."

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