Internet Banks' Increase in Mid-to-Low Credit Borrowers' Loan Share Slows in Q1

June 26 Bank Federation Disclosure
K-Bank Declines, KakaoBank and TossBank Slightly Rise

The proportion of credit loans to middle- and low-credit borrowers by the three internet banks, including KakaoBank, K Bank, and Toss Bank, slowed down in the first quarter of this year.

According to the disclosure by the Korea Federation of Banks on the 26th, the proportion of credit loans to middle- and low-credit borrowers (based on outstanding balance) was 25.7% for KakaoBank, 23.9% for K Bank, and 42.06% for Toss Bank.

This refers to the loan proportion of borrowers in the lower 50% credit score bracket (KCB score of 860 or below) within each internet bank's total household credit loans, based on KCB standards.

By bank, K Bank's proportion of credit loans to middle- and low-credit borrowers fell by 1.2 percentage points from 25.1% at the end of last year. KakaoBank saw a slight increase of 0.3 percentage points compared to the previous quarter. Toss Bank, which has the highest proportion in the 40% range, increased by 1.69 percentage points compared to the previous quarter.

Financial authorities mandated in 2021 that internet banks set and disclose annual target proportions for loans to middle- and low-credit borrowers. This was intended to ensure operations aligned with the original purpose of expanding loan supply to the middle- and low-credit segments.

The target proportions set by the three banks for the end of this year are 30% for KakaoBank, 32% for K Bank, and 44% for Toss Bank.