South Korea internet banks keep low-credit lending above target as profits diverge

Aug 30, 2026 02:22 (23d ago)

South Korea’s three internet-only banks kept second-quarter low-credit lending above reported regulatory targets.
Combined first-half profit rose 15.1% to 447 billion won, with KakaoBank and Toss Bank gaining while K Bank declined.
Refinancing and alternative-data underwriting expanded access, while asset-quality trends diverged across the lenders.

South Korea’s three internet-only banks kept their second-quarter lending shares to mid- and low-credit borrowers above financial authorities’ targets, even as the ratios declined with overall loan growth. Based on average balances, Toss Bank led at 34.2%, followed by KakaoBank at 31.9% and K Bank at 31.2%-31.3%. On new originations, KakaoBank led at 38.4%, Toss Bank at 32.7% and K Bank at 32.4%. The banks’ combined first-half net profit rose 15.1% year on year to 447 billion won ($327.0 million), led by KakaoBank’s 328 billion won and Toss Bank’s record 58.9 billion won, while K Bank’s profit fell 28.6% to 60.1 billion won as prior-year gains from loan receivable sales faded. Refinancing, alternative-data credit scoring and sole-proprietor lending supported access for weaker-credit borrowers, while asset-quality indicators improved at KakaoBank and Toss Bank but weakened at K Bank.