Inbaeng Faces Challenges Achieving Mid-Interest Loan Targets... "Still Doing Our Best"

Only 3 Months Left This Year, Challenging Situation Ahead

[Asia Economy Reporter Kiho Sung] It appears that internet-only banks will find it practically difficult to meet the promised proportion of loans to middle- and low-credit borrowers set with financial authorities. Since the financial authorities have stated that penalties will be imposed if the targets are not met, internet banks are increasingly concerned.

According to the financial sector on the 29th, KakaoBank and K Bank need to handle approximately 1.4 trillion KRW and 500 billion KRW in additional middle-interest loans respectively in the fourth quarter of this year to meet their promised proportions by year-end.

According to figures released by the Korea Federation of Banks, as of the end of September, the proportion of middle-interest loans by internet banks was 13.4% for KakaoBank and 13.7% for K Bank. Their targets for this year are 20.8% and 21.5%, respectively.

KakaoBank supplied 1 trillion KRW in middle-interest loans by September this year, and K Bank supplied 465 billion KRW by October. With only three months left in the fourth quarter, considering the current figures, achieving the targets seems difficult.

The situation is even more challenging for Toss Bank. Launched in October, Toss Bank is currently unable to issue loans due to the financial authorities' household loan volume control regulations. Toss Bank’s proportion of middle-interest loans stands at 28.2%, far exceeding other banks. However, its target is 34.9%, so it is also failing to meet the goal.

Although little time remains this year, internet banks state they will do their best to achieve the middle-interest loan targets. This is because they expect that the financial authorities will not impose penalties unconditionally but will consider how much effort the internet banks have made.

An official from an internet bank emphasized, "I believe the financial authorities will not impose sanctions unconditionally if the targets are not met. However, the middle-interest loan targets are promises not only to the government but also to customers, so we will do our best until the end."