Woori Bank has reduced its self-employed loans by about 4.7 trillion won in the first half of this year.
According to the financial sector on the 29th, the self-employed loan balance of the four major banks, KB Kookmin, Shinhan, Hana, and Woori, was 268.668 trillion won at the end of last month, a decrease of 3.514 trillion won compared to the end of last year (272.182 trillion won).
This is the result of Woori Bank significantly reducing its self-employed loans. The self-employed loan balance of Woori Bank decreased sharply from 49.654 trillion won to 44.9627 trillion won, a drop of 4.6913 trillion won. In contrast, KB Kookmin Bank increased its self-employed loans by 1.1565 trillion won, while Shinhan Bank increased by 408.6 billion won during the same period. Hana Bank's self-employed loans decreased by 388.7 billion won.
A Woori Bank official noted that the proportion of real estate rental-related loans among self-employed loans is 33.4%, which is higher than the average of other banks (29.5%), and they are adjusting the portfolio. "As a result, self-employed loans have been slightly reduced," the official said. They added, "This is a measure to transition credit focused on rental businesses to productive institutional sectors such as manufacturing, new growth industries, and advanced industries."
There is also a purpose for soundness management. Woori Bank is in a situation where soundness management is urgent. The Financial Services Commission conditionally approved Woori Financial Group's acquisition of Tongyang and ABL Life Insurance, but Woori Financial Group must raise its common equity tier 1 (CET1) capital ratio to over 13% by 2027. To achieve this, they need to reduce the risk-weighted assets (RWA), which increase with loans that have high credit risk, such as self-employed loans.
In contrast to self-employed loans, corporate loans showed steady growth without differences across banks. The corporate loan balance of the four major banks stood at 167.2738 trillion won at the end of last month, an increase of 2.9669 trillion won compared to the end of last year (164.3069 trillion won).
As it has become difficult to increase household loans due to strengthened management of household loans, banks have focused on 'supporting corporations' this year. In particular, they are concentrating on increasing corporate loans that are low-risk and have a low arrears rate.
A source from a commercial bank said, "Self-employed loans increase RWA, affecting the decline of the CET1 ratio," and noted, "It is not easy to significantly increase self-employed loans from a soundness management perspective."