South Korean internet banks pivot to business loans

South Korean internet banks are aggressively expanding into corporate finance and non-interest income sectors to offset growth constraints caused by household loan regulations. According to first-half reports from KakaoBank, K-Bank, and Toss Bank, the total balance of loans for individual business owners reached 8.32 trillion won, a 50.6% increase compared to the same period last year.

K-Bank saw the most rapid growth, with its individual business loan balance increasing by 108.7% year-on-year to 3.3 trillion won. KakaoBank's balance also rose by 45.2% to 3.68 trillion won. In contrast, Toss Bank reported a 4.9% decrease in its individual business loan balance, totaling 1.33 trillion won.

To diversify revenue, these banks are targeting new growth engines. KakaoBank is expanding its loan comparison services and planning to enter the automotive finance market. K-Bank aims to broaden its collateral scope for business loans and explore digital assets and stablecoins. Toss Bank is focusing on asset management and investment services, including fund brokerage, to reduce reliance on interest income.