Inbaeng 3sa Loan Portfolio Surpasses 56 Trillion Won, Up 42%... Delinquency Rate Remains a 'Challenge'

The outstanding loan balance of internet-only banks has surpassed 56 trillion won. However, with rising delinquency rates, managing soundness remains a persistent challenge.

According to the financial sector on the 1st, as of the end of June, the outstanding loan balance of the three internet-only banks (Kakao, K Bank, and Toss Bank) was approximately 56.616 trillion won. This represents an increase of about 16.7757 trillion won (42%) compared to the same period last year (39.8403 trillion won). Over 90% of the loans from internet-only banks are household loans.

Looking at each bank, Kakao Bank had about 33.9 trillion won, K Bank 12.67 trillion won, and Toss Bank 10.046 trillion won. In particular, Toss Bank, a latecomer, nearly increased its loan balance by 2.4 times compared to the same period last year (4.294 trillion won). Toss Bank, which disclosed its performance the day before, announced that its cumulative net interest income reached 243.8 billion won due to continuous growth in its lending business.

Internet-only banks have steadily expanded their loans based on interest rate competitiveness. According to the Bankers Association, the average mortgage loan interest rates (installment repayment method, as of July) for Kakao Bank and K Bank are between 4.16% and 4.17%, which is 0.12 percentage points lower at the lower end and 0.48 percentage points lower at the upper end compared to the five major banks?KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup (4.28% to 4.65%). On this day, K Bank also lowered the interest rates for 'Credit Loan Plus' and 'CEO Credit Loan' by up to 1 percentage point and 0.78 percentage points annually, respectively.

The deposit balances of the three internet-only banks also recorded about 82.47 trillion won, increasing by more than 8 trillion won compared to the previous year. However, Toss Bank's deposit balance as of the end of June was 21.5 trillion won, down nearly 7 trillion won from the same period last year (28.4787 trillion won). This contrasts with Kakao Bank and K Bank, which increased their deposits by 10 trillion won and 5 trillion won, respectively, during the same period.

In March, Toss Bank faced a liquidity outflow crisis following rumors related to the launch of a 'pre-interest payment' deposit product. However, Toss Bank explained, "There was an adjustment in interest rates as part of diversifying the deposit portfolio, and the decrease seems natural due to the increase in high-interest products at other banks during this period," adding, "We are maintaining a stable deposit base in the 20 trillion won range."

Based on such loan and deposit growth, internet-only banks posted strong results in the second quarter of this year. Kakao Bank recorded a half-year net profit of 183.8 billion won, marking the best performance on a half-year basis. Although K Bank's net profit decreased by 31% year-on-year to 14.7 billion won due to provisions, it maintained profitability for nine consecutive quarters. Toss Bank also reduced its net loss to 10.4 billion won in the second quarter, about one-third of the previous quarter's loss (-28 billion won), increasing the likelihood of turning profitable in the third quarter.

However, managing soundness remains a challenge for internet-only banks. Considering that these banks must maintain a high proportion of loans to medium- and low-credit borrowers, their delinquency rates are inevitably higher than those of commercial banks. Nonetheless, all three banks saw significant increases in delinquency rates compared to the previous year. Kakao Bank's delinquency rate rose by 0.19 percentage points to 0.52% in the second quarter from 0.33% in the same period last year, while K Bank's delinquency rate increased by 0.34 percentage points to 0.86% from 0.52% year-on-year.

Toss Bank experienced the steepest rise in delinquency rates among the three. Its delinquency rate jumped by 1.41 percentage points to 1.56% in the second quarter from 0.15% in the same period last year. This increase appears to be due to rising delinquencies in loans to medium- and low-credit borrowers. Toss Bank has the highest proportion of loans to medium- and low-credit borrowers among the three internet-only banks at 38.5%, compared to Kakao Bank's 27.7% and K Bank's 24%.

Regarding delinquency rates, a Toss Bank official stated, "The delinquency rate is at a manageable level predicted based on the proportion of low-credit borrowers, and we maintain the highest level of loan loss provisions in the banking sector, ensuring sufficient preparedness for all situations." The official added, "Since relatively low-default loan products such as jeonse and monthly rent loan products will be launched soon, the delinquency rate is expected to gradually stabilize and decline starting from this quarter."

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