Internet Banks Surpass Mid- and Low-Credit Loan Targets for Q3

The three internet banks (KakaoBank, K Bank, and Toss Bank) all exceeded their target ratio of loans to mid- and low-credit borrowers, set at 30% for the third quarter of this year.

According to the financial sector on November 28, the average balance ratio of loans to mid- and low-credit borrowers at the three banks ranged from 32.9% to 35.2%. The average ratio based on new loan originations was also between 33.9% and 43.7%. Specifically, KakaoBank recorded 32.9% and 35.4%, Toss Bank posted 35.2% and 43.7%, and K Bank reported 33.1% and 33.9% for each respective category.

Toss Bank explained that by the third quarter of this year, it had provided loans to mid- and low-credit borrowers, including personal credit loans for 350,000 individuals in the bottom 50% of credit scores (870 points or below, based on KCB standards), as well as business loans for sole proprietors with SOHO grades of 4 or lower (KCB standard). The total amount of loans supplied to mid- and low-credit borrowers during this period was reported to be 9.5 trillion won. Toss Bank also noted that, as of the end of the third quarter, the proportion of mid- and low-credit loans within its business loans for sole proprietors reached 67% (based on outstanding balance).

KakaoBank stated that the total volume of mid- and low-credit loans over the eight years since its launch has reached 15 trillion won. The outstanding balance of these loans in the third quarter was tallied at 4.9 trillion won. Despite maintaining the proportion of mid- and low-credit loans above 30%, KakaoBank’s delinquency rate for the third quarter was managed at a stable level of 0.51%, ensuring soundness.

K Bank also reported that, as of the third quarter of this year, the cumulative amount of unsecured loans to mid- and low-credit borrowers since its launch in 2017 has reached 8.033 trillion won. The amount of new unsecured loans supplied to mid- and low-credit borrowers in the third quarter was 333.8 billion won, representing an increase of about 20% compared to 278.9 billion won in the previous quarter.