The launch of Toss Bank's mortgage loan for dwellings is imminent. Toss Bank is the only internet bank in Korea that does not handle mortgage loans. Toss Bank plans to diversify its product lineup with mortgage loans and loans to corporations, but the financial authorities' tough lending curbs are expected to be a variable for results.
According to the financial industry on the 7th, Toss Bank will soon apply to the financial authorities for a terms and conditions review of its mortgage loan product. Applying for a terms and conditions review is effectively the final step before launching a new financial product, and the review typically takes one to two months to complete.
Once the terms and conditions review is completed, Toss Bank aims to offer mortgage loans within the first half of this year. To handle mortgage loan products, Toss Bank selected a real estate price information provider early last year and has invested heavily in product design and infrastructure development.
Toss Bank sees entry into the mortgage market as a turning point for a qualitative shift. Mortgage loans are products that must be managed for more than 30 years, so a bank's capabilities are considered crucial. Mortgage loans with solid collateral also help strengthen a bank's soundness. As of the third quarter of last year, Toss Bank's arrears rate was 1.07%, higher than KakaoBank (0.51%) and Kbank (0.56%).
Toss Bank is also preparing corporate lending to diversify its portfolio. From this month through Oct., Toss Bank will build a corporate credit assessment model and aims to launch guaranteed corporate loans by the end of the year.
The variable is the financial authorities' strong lending regulations. Since the second half of last year, as the financial authorities tightened household loan regulations, banks have raised the threshold for borrowing by reducing preferential rates and increasing spreads. A financial industry official said, "Typically, when a new loan product comes out, banks attract new customers by lowering rates, but in an environment of tightening credit, it's unclear whether aggressive sales will be possible."