Kookmin Hits 140% of Target as of Last Month, Highest Among Major Banks
Saemaul Reaches 380% in Secondary Sector... Over 5 Trillion Won Increase This Year
KB Kookmin Bank and Saemaul Geumgo are expected to exceed their annual household loan growth targets for this year, which means they are likely to face penalties in next year’s lending limits.
Financial authorities impose penalties on financial institutions that fail to meet their loan targets by reducing their lending limits for the following year by the amount they exceeded.
According to the office of Lee Inyoung, a member of the National Assembly’s Political Affairs Committee from the Democratic Party of Korea, KB Kookmin Bank’s ratio of actual household loan growth to its annual target (based on business plans, excluding policy products) stood at 140.1% as of last month. This is the highest among the five major commercial banks.
Initially, KB Kookmin Bank set a household loan growth target of 2.0061 trillion won for this year with the financial authorities, but as of the end of November, the actual increase was 2.8099 trillion won.
The financial authorities expect that KB Kookmin Bank will be the only major commercial bank to exceed its target.
Other major commercial banks have also slightly exceeded their targets.
Hana Bank had set a target increase of 910.2 billion won for this year, but as of the end of last month, the actual increase was 1.0548 trillion won, reaching 116% of the target.
Shinhan Bank also saw its household loans increase by 1.7025 trillion won by last month, achieving 104% of its target of 1.6375 trillion won.
Nonghyup Bank is at 69.6% of its target, and Woori Bank is at 84.9%, indicating they still have room within their limits.
Among secondary financial institutions, Saemaul Geumgo’s household loan balance has reportedly increased by nearly 5 trillion won so far this year.
According to financial authorities and the mutual finance sector, Saemaul Geumgo’s household loan balance increased by 4.6 trillion won from January to November this year. This is about 380% of the target submitted to the financial authorities.
This growth is unprecedented not only among mutual finance institutions but also across the entire secondary financial sector.
Saemaul Geumgo’s household loan growth far outpaces Nonghyup (2.5 trillion won), Credit Union (1.2 trillion won), and Suhyup (300 billion won).
Some point out that this is due to Saemaul Geumgo being supervised by the Ministry of the Interior and Safety rather than financial authorities. In addition, the high delinquency rate and the resulting incentive to increase the loan balance are also seen as contributing factors to this rapid growth.
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