NH Nonghyup's Corporate Loans?..."Quantum Jump with 3 Trillion Increase in Q1 Alone"

NH Nonghyup, Previously Lagging Behind Other Banks, Declares First Year of Corporate Loans
'Corporate Growth Theory' Product Surpasses 1 Trillion KRW in Just 28 Business Days
Minimum Interest Rate as Low as 2.44%

Targeting an 8.2 Trillion KRW Increase This Year
To Be Invested in Facility Funds to Create a Virtuous Cycle Structure

▲ Lee Yeon-ho, Vice President of NH Nonghyup Bank, stated on the 23rd, "This year, we will raise our standards to make it the 'first year of corporate loans' where we can stand shoulder to shoulder with other commercial banks."

[Asia Economy Reporter Sim Nayoung] NH Nonghyup launched the ‘NH Corporate Growth Loan’ product at the end of January this year. It is a corporate loan product targeting companies with high credit ratings or those in prime industries. The loan interest rate ranges from 2.44% to 3.95%. Preferential interest rates of up to 1.50 percentage points are applied depending on the industry and transaction performance. (As of the launch date) As a product with competitive interest rates, it received a response as soon as it hit the market. It exceeded 1 trillion KRW in performance within just 28 business days. As of the 23rd, the scale has grown to 1.3 trillion KRW.

Lee Yeon-ho, Deputy Head of Corporate Investment Finance, whom we met at the NH Nonghyup headquarters in Chungjeongno, Seoul, said, "It is true that we have been somewhat behind in corporate credit, but this year we will raise our level to make it the ‘first year of corporate credit’ where we can stand shoulder to shoulder with other commercial banks."

Corporate Credit is a Regulation-Free Zone
An Area That Can Grow Every Year

‘Expansion of corporate credit’ was a keyword emphasized by all five major commercial bank CEOs in their New Year’s addresses earlier this year, highlighting its importance in the financial sector. Household loans faced many restrictions due to government policies such as total volume regulation, loan-to-value ratio (LTV), and debt service ratio (DSR) regulations. Corporate credit, being the cornerstone of the domestic industry, is free from such regulations, giving banks ample room to expand.

NH Nonghyup’s target increase for corporate credit this year is 8.2 trillion KRW. Compared to other commercial banks increasing by about 10 trillion KRW year-on-year, this is a high level despite being a latecomer. Deputy Head Lee said, "Driven by the NH Corporate Growth Loan product, we have already increased corporate credit by 3.1317 trillion KRW, which is 38% of this year’s target, as of the 22nd of this month," adding, "Next year, we plan to raise the net increase target to 9 trillion KRW, and 9.2 trillion KRW the year after." At the current pace, it is expected that the era of 100 trillion KRW in corporate credit will be smoothly opened around July this year on a cumulative basis.

Deputy Head Lee explained, "As important as the increase in corporate credit is the purpose of the loan and its nature." He emphasized that facility loans should be made mainly to medium-sized and small enterprises building or expanding factories. "When a company initially needs facility funds, we must provide them, which then connects to operating funds and creates a virtuous cycle," he said, adding, "We plan to support about half of the annual net increase in corporate credit as facility funds." He identified industries related to materials, parts, and equipment, as well as agro-food industries, as ‘strategic target industries’ that receive policy preferential interest rates.

Corporate Credit Marketing Targeting Local SMEs
Transforming Seoul and Metropolitan Area Branches into Financial Centers

▲Kwon Jun-hak, President of NongHyup Bank, is listening to an explanation about the manufacturing process of precursor materials during his visit to Ecopro GM located in Buk-gu, Pohang-si, Gyeongbuk Province last February.

NH Nonghyup Bank President Kwon Jun-hak is also supporting corporate credit. Despite the COVID-19 situation, he frequently travels to provinces for corporate credit business. On the 24th, he will visit Namdong Industrial Complex in Incheon to meet with representatives and employees of small and medium-sized enterprises. Since the beginning of this year, he has visited factory zones in Goesan, Chungbuk, and Pohang, Gyeongbuk, to check on economic conditions, investment status, and funding needs. The judgment is that when the president personally engages in corporate credit marketing, customer trust will be higher than at other banks.

NH Nonghyup’s strategy also includes consolidating branches in Seoul and the metropolitan area into financial centers. Deputy Head Lee said, "Financial centers have corporate-specialized RMs (Relationship Managers) who are not available at small-scale branches, and they have authority and screening capabilities, so the processing speed of corporate finance is fast," adding, "Since 60% of all domestic companies are located in Seoul, Gyeonggi, and Incheon, it is important to open financial centers in these areas to secure the corporate credit market." The number of financial centers is planned to increase from 59 last year to 65 this year, and to 71 next year.

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