KakaoBank's credit risk exposure increased by nearly 10 trillion won in six months. This is seen as resulting from KakaoBank's focus on loans to sole proprietors, where the share of mid- to low-credit borrowers is relatively high, in line with the Lee Jae-myung administration's household loan regulation policy.
According to KakaoBank's semiannual report on the 22nd, the company's credit risk exposure was 81.5378 trillion won, up 13% (9.5538 trillion won) from the same period a year earlier (71.9840 trillion won). This exceeded the increase in household and corporations loan balances (6.7%) over the same period. When credit risk exposure rises, risk-weighted assets (RWA) increase, and KakaoBank must build more capital.
KakaoBank expanded lending to mid- to low-credit borrowers in the first half. Earlier, financial authorities implemented a plan requiring internet-only banks to supply at least 30% of their average outstanding unsecured personal loans to mid- to low-credit borrowers. In particular, from Feb., an additional rule required at least 30% based on new loan originations. Accordingly, in the first half of this year, KakaoBank allocated 49.4% of its unsecured personal loans to mid- to low-credit borrowers.
Due to the government's tighter household loan regulations, KakaoBank must expand loans to corporations. KakaoBank's outstanding corporate funds loans in the first half were 2.5388 trillion won, up 34% from the end of last year (1.8946 trillion won). By contrast, household funds loans grew only 2.3% over the same period, from 41.3075 trillion won to 42.2617 trillion won.
Earlier, the government, through the "6·27 household loan management plan" that caps mortgage loan limits at 600 million won, said it would cut the second-half household loan aggregate target by 50% from the previous level. As loan limits were reduced to within annual income, it became difficult to generate revenue through additional household loan supply. Moreover, the share of household loans at internet-only banks already exceeds 90%. Although internet-only banks were launched with the aim of including mid- to low-credit borrowers, they have faced criticism for failing to fulfill that role.
The problem is that internet-only banks like KakaoBank cannot lend to corporations other than small and midsize enterprises. Even among SMEs eligible for loans, in practice only sole proprietors akin to self-employed individuals can borrow. If loans to sole proprietors increase, delinquency rates rise, weakening soundness or leading to capital burdens.
In the end, internet-only banks are expected to focus on loans to sole proprietors while making soundness management the top priority. In particular, they are likely to lend mainly against high-quality collateral. KakaoBank plans to launch mortgages for sole proprietors and syndicated loans that can share risk. KakaoBank's net income for the first half was 263.7 billion won, up 14% from a year earlier. However, net interest margin fell 0.25 percentage point over the same period to 1.92%.
The same situation applies to other internet-only banks. Kbank plans to expand collateral for sole-proprietor mortgages to include small apartments and commercial properties, and to launch a syndicated loan product with Busan Bank. Toss Bank, which already operates syndicated loans, also plans to launch a new product with BNK Kyongnam Bank.