1.9 Trillion Increase in 'Relational Finance' in the First Half of the Year... 'Shinhan Bank' Recognized as an Excellent Bank

Long-term funds with a maturity of over 3 years supplied to SMEs
Average balance interest rate 4.69%, down 0.32%p
Gwangju Bank selected as an excellent small and medium-sized bank

The scale of relational finance, which provides loans of more than three years, equity investments, and management consulting to low-credit and collateral-deficient companies with favorable business prospects by comprehensively evaluating quantitative and non-quantitative information, increased by 1.9 trillion KRW in the first half of this year. Shinhan Bank ranked first among excellent large groups in relational finance, while Gwangju Bank took the top spot among excellent small and medium-sized groups.

According to the Financial Supervisory Service on the 3rd, the balance of relational finance stood at 18.4 trillion KRW at the end of June this year, up 11.4% from 16.5 trillion KRW at the end of last year. Loans to small and medium-sized corporations increased by 8.6% during the same period, and loans to individual business owners rose by 17.2%.

The average interest rate on relational finance balances was 4.69%, down 0.32 percentage points (P) from 5.01% at the end of last year, and 0.36 percentage points lower than the overall SME loan interest rate of 5.05%. The delinquency rate recorded 0.52%, up 0.07 percentage points from 0.45% at the end of last year, but still 0.06 percentage points lower than the SME loan delinquency rate of 0.58%.

By industry, loans were mainly supplied to sectors facing difficulties such as high interest rates and high prices, with wholesale and retail trade (32.1%), manufacturing (22.2%), and services (15.6%) in that order.

Additionally, in the first half of the year’s relational finance excellent bank evaluation results, Shinhan Bank and Kookmin Bank ranked first and second among large groups. Shinhan Bank, ranked first, excelled in cumulative supply amount and the proportion of unsecured loans, while Kookmin Bank, ranked second, showed excellence in the number of business agreement signings and the proportion of loans to low-credit borrowers.

Among small and medium-sized groups, Gwangju Bank and IM Bank ranked first and second respectively. Gwangju Bank, ranked first, excelled in the number of business agreement signings and consulting performance, while IM Bank, ranked second, showed strength in cumulative supply amount and the proportion of early-stage companies.

The Financial Supervisory Service plans to continue expanding the supply of relational finance to prevent a contraction in funding for promising SMEs amid increasing economic uncertainties. Furthermore, the FSS will disclose the results of the excellent bank selection on its website and provide incentives by reflecting these results in the relational finance evaluation during year-end awards.