Despite Loan Regulation Pressure... K-Bank's 'Solo' Aggressive Sales (Comprehensive)

Increasing Limits and Actively Launching New Products

[Asia Economy Reporter Jin-ho Kim] While the financial authorities' pressure has led to a ‘loan reduction’ phenomenon across the entire financial sector, only the first internet bank, K-Bank, is accelerating its business expansion, drawing attention. Unlike most banks that have reduced limits and stopped sales, K-Bank is taking aggressive actions such as significantly raising limits and launching new products.

According to the financial sector on the 27th, K-Bank will launch two new products by the end of this month: Jeonse loans and youth Jeonse loans. These products are characterized by allowing users to check the expected interest rate and limit immediately by entering only simple information. Leveraging the advantages of an internet bank, all processes are provided 100% non-face-to-face. The Jeonse loan limit is 220 million KRW, and the youth Jeonse loan limit is 100 million KRW. The loan interest rate is as low as 1.98% per annum (as of the 26th).

Since launching apartment mortgage loans last year, K-Bank has diversified its loan portfolio by consecutively launching Saetdol loans and Jeonse loans this year. K-Bank’s strategy is to actively supply loans to low- and medium-credit borrowers through this approach.

The credit loans with low interest rates and high limits are also more competitive compared to commercial banks. Currently, most commercial banks have reduced credit loan limits to 50 million KRW, but K-Bank’s limit is up to 250 million KRW, which is five times higher. The overdraft account limit is also around 150 million KRW.

The reason K-Bank can actively expand its business against the current market trend is that it is located in a blind spot of the financial authorities’ total volume regulation. The total volume regulation is managed based on the growth rate compared to the end of the previous year, but K-Bank has effectively started loan operations only this year. As of the end of June, K-Bank’s loan balance was about 5.05 trillion KRW. Although it shows a rapid increase compared to the end of last year (2.9887 trillion KRW), it still remains the smallest among major banks in scale.

The financial sector analyzes that the current situation of a ‘loan crisis’ could be an opportunity for K-Bank. The conditions have been created to significantly boost the previously slow growth through high limits and new products. A financial sector official said, "Since K-Bank is still in the early stages of growth and much smaller in scale, the financial authorities will inevitably provide some convenience. It also seems clear that this is an opportunity to close the gap with KakaoBank and others that have widened so far."

Meanwhile, the loan reduction trend among commercial banks, initiated by NongHyup Bank, continues. Woori Bank announced on the same day that starting next month, it will handle household credit loan limits within annual income.

Woori Bank’s credit loan limit reduction is the third case following NH NongHyup Bank and Hana Bank. NongHyup Bank reduced the maximum limit for new credit loans from 200 million KRW to below 100 million KRW and within 100% of annual income starting from the 24th. Hana Bank also limited personal credit loan limits within annual income and reduced overdraft account loans (limit loans) to a maximum of 50 million KRW per individual starting the same day.

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