SEOUL, April 5 (Yonhap) — Household lending by South Korean online banks rose nearly 8 percent in the first three months of this year amid falling lending from offline competitors, industry sources said on Tuesday.
Outstanding household loans by the three online banks – Kakao Bank, K-Bank and Toss Bank – stood at 36.14 trillion won ($29.7 billion) at the end of March, up from 7.9%, or 2.66 trillion won, from three months earlier. .
The rate of increase is above the objective of the financial authorities of 4 to 5% for this year.
Toss Bank, which began operations in early October last year, granted the highest amount in the January-March period at some 1.84 trillion won. K-Bank increased household lending by 720 billion won, with Kakao Bank’s gaining some 100 billion won.
In contrast, KB Kookmin and four other offline banks cut household lending by 5.86 trillion won in the three-month period from the end of last year.
Industry watchers said the solid increase in household lending from online banks came amid financial authorities’ flexible stance aimed at helping laggard Toss Bank to take root.
The marketing strategy of online lenders was also responsible for targeting borrowers with low and medium credit scores, who find it difficult to obtain loans from commercial banks.
A finance official said he saw no particular need to intervene in the market situation, as total household lending by banks has fallen this year.
The government has capped bank loans and unsecured mortgages to households in a bid to curb rising household debt, which market watchers said could dampen the local economy.