In-Bank Household Loans Increase for 5 Consecutive Months... Balanced Growth in Jeonse, Monthly Rent, and Mortgage Loans

Subscriber Growth Continues
Concerns Over Loan Risks for Medium-Low Credit Borrowers Amid High Interest Rates and Economic Slowdown

[Asia Economy Reporter Sim Nayoung] The outstanding balance of household loans at internet-only banks has recorded an increase for five consecutive months. This contrasts with the five major commercial banks, whose household loans have been declining for five months straight. According to the banking sector on the 5th, as of the end of last month, the outstanding household loan balances of KakaoBank and K Bank were 26.5445 trillion KRW and 8.49 trillion KRW, respectively. Compared to the end of April, these amounts increased by 310 billion KRW and 288.1 billion KRW, respectively.

As of the end of April, Toss Bank's outstanding household loan balance was 2.8354 trillion KRW. Toss Bank's loan balance has been increasing by an average of about 400 billion KRW each month this year, so it is estimated that the upward trend continued in May as well.

In the case of internet banks, not only loans to medium- and low-credit borrowers but also jeonse and monthly rent loans as well as mortgage loans are increasing. KakaoBank introduced non-face-to-face mortgage loans, while Toss Bank and K Bank launched loans for individual business owners, entering the corporate finance sector. In the second half of the year, KakaoBank is also scheduled to launch individual business owner loans and exclusive deposit products.

As of the end of last month, KakaoBank had 18.96 million customers, and K Bank had 7.72 million customers. Compared to the previous month, these numbers increased by 180,000 and 100,000, respectively. K Bank partnered to allow users to view its jeonse loan products through KakaoPay's loan product brokerage service. Toss Bank has also been listed on the loan comparison and brokerage platform Finda since April.

Concerns are also emerging about the aggressive marketing by internet banks. If high interest rates coincide with an economic downturn, the ability of medium- and low-credit borrowers, who are the main customers of internet banks, to repay principal and interest may deteriorate significantly. Due to the aggressive tightening by major central banks worldwide, benchmark interest rates are rising rapidly, and market interest rates are soaring accordingly. There are also forecasts that the economy may weaken.

Meanwhile, the outstanding household loan balance of the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 701.0615 trillion KRW at the end of last month, down by 1.3302 trillion KRW compared to the end of April. The decrease last month was larger than that in April (802 billion KRW). Although jeonse deposit loans increased, the decline was due to decreases in unsecured loans and mortgage loans.

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