South Korea's three internet-only banks saw their share of unsecured loans extended to mid- to low-credit borrowers edge lower in the second quarter, though all three remained above the 30% target set by financial regulators.
Toss Bank's share of such lending, measured by average outstanding balance, stood at 34.2%, followed by KakaoBank at 31.9% and K Bank at 31.3%, according to financial industry sources on the 30th.
Each bank slipped from the first quarter. Toss Bank fell 0.5 percentage points from 34.7%, KakaoBank declined 0.4 percentage points from 32.3%, and K Bank dropped 0.6 percentage points from 31.9%.
The measure tracks how much of a bank's total average balance of household unsecured loans goes to borrowers in the bottom 50% of Korea Credit Bureau credit scores, covering personal and sole-proprietor unsecured loans as well as policy loans for low- and middle-income borrowers that exceed guarantee limits.
All three also cleared the 32% target on newly extended loans. KakaoBank led at 38.4%, followed by Toss Bank at 32.7% and K Bank at 32.4%. Compared with the previous quarter, KakaoBank fell 7.2 percentage points, Toss Bank 1.8 percentage points and K Bank 1.2 percentage points.
KakaoBank extended 520 billion won ($377 million) in unsecured loans to mid- to low-credit borrowers in the second quarter. New lending topped 1 trillion won in the first half, and cumulative lending has exceeded 16 trillion won since the bank launched in 2017. Among borrowers who took out mid-credit loans in the second quarter, 50% saw their credit scores rise by an average of 47 points within a month of drawing the loan, and 21% moved into the high-credit tier.
K Bank extended 366.3 billion won in new unsecured loans to mid- to low-credit borrowers in the second quarter, up 31% from a year earlier. Cumulative lending has passed 9 trillion won since its launch. Its private-sector mid-rate lending totaled 235 billion won in the quarter, the largest among the internet-only banks.
About 380,000 mid- to low-credit customers have borrowed from Toss Bank on a cumulative basis. Of those who took out loans in the second quarter, 44% saw their credit scores climb by an average of 43 points a month after drawing the loan. In the first half, Toss Bank supplied roughly 1 trillion won in policy lending products for low- and middle-income borrowers, including 576.1 billion won in mid-rate loans such as Saitdol loans and 409.9 billion won in Sunshine loans.
