Lowering Loan Interest Rates and Raising Savings Deposit Rates... K-Bank Launches Offensive

Preliminary Steps for Business Structure Diversification
Accelerating Performance Improvement Ahead of IPO

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] K-Bank has been showing aggressive moves this month by lowering loan interest rates while raising deposit and savings interest rates. This is interpreted as a preliminary step for diversifying its business structure amid restrictions on household loans. The bank is securing funds stably to lay the groundwork for future expansion into areas such as mortgage loans and corporate loans, while accelerating performance improvement ahead of its planned listing next year.

According to the financial industry on the 15th, K-Bank announced that it will raise interest rates on deposit products such as deposits and savings by up to 0.3 percentage points (p). As a result, savings interest rates will rise to a maximum of 2.80% per annum, and deposit interest rates will increase to a maximum of 2.40% per annum.

The day before, it also lowered apartment mortgage loan interest rates. This was to commemorate surpassing a cumulative handling amount of 1 trillion won in apartment mortgage loans and to respond to borrowers' demand for 'switching to fixed interest rates' amid rising interest rates. Accordingly, the fixed interest rate for apartment mortgage loan products was lowered by 0.50%p to 3.50% per annum. Considering that the lowest fixed interest rates for mortgage loan products at major commercial banks last month, according to the Bankers Association disclosure, were around 3.7?4%, this is seen as an aggressive product.

While influenced by the base interest rate hike, this move is interpreted as a preliminary step to actively restructure the business and boost performance amid restrictions on household loans. By attracting funds and customers with aggressive deposit products, the bank aims to stably establish a foundation for future expansion into mortgage loans, corporate loans, and other areas.

Previously, as the government strengthened total volume regulations last year recommending household loan growth rates of 5?6%, creating an atmosphere of loan restrictions, internet-only banks that had been expanding operations focusing on household loans and low-credit borrowers have slowed down. Accordingly, from this year, there is a trend of actively expanding into areas such as personal business loans and mortgage loans.

Meanwhile, with the listing approaching, this is also interpreted as a move to actively improve performance from the beginning of the year. Earlier, K-Bank recently selected NH Investment & Securities, Citi Securities, and JP Morgan as lead underwriters for the listing, and Samsung Securities as a co-underwriter. This strategy aims to continue the momentum of recording the first-ever profit this year while reducing dependence on the virtual asset exchange 'Upbit,' which had been pointed out as a weakness. A financial industry official said, "While this may be a natural flow during a period of base interest rate hikes, taking the initiative is clearly a choice that can draw positive responses from consumers," adding, "Expanding the user base and attracting stable funds will help diversify the business structure in the future."

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