KakaoBank and K bank, South Korea’s top two internet-only banks, experienced a significant surge in demand for home mortgage loans that collectively totaling over 2.3 trillion won ($1.73 billion) over a period of two months.

The internet banks have been capturing a growing share of the housing loan market, with KakaoBank alone reporting a substantial increase in its loan portfolio and its loan growth in the sector already outpacing that of the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup).

According to data, KakaoBank’s home mortgage loan balance at the end of August, which includes rental deposit loans, amounted to about 19.3 trillion won. Compared to the balance at the end of June, this represents an increase of 1.99 trillion won or 11.5 percent.

Similarly, K bank’s home mortgage loan balance also grew from 3.69 trillion won at the end of June to 4.06 trillion won at the end of August, up 372.1 billion won or 10.1 percent.

In contrast, during the same period, the home mortgage loan balances of the five major commercial banks increased from 511.4 trillion won to 514.9 trillion won, up 3.59 trillion won or 0.7 percent. The comparison clearly highlights the more pronounced growth trajectory of the two internet banks.

KakaoBank and K bank have been aggressively promoting their home mortgage loan businesses this year by offering lower interest rates compared to traditional banks. According to the Korea Federation of Banks (KFB), the average mortgage rates offered by KakaoBank and K bank in July were 4.16 percent and 4.17 percent respectively.

While both banks saw their average rates increase compared to June to 4.02 percent and 4.14 percent, the rates remained lower than those offered by the five major banks that ranged from 4.28 percent to 4.70 percent.

KakaoBank and K bank said that 50 to 60 percent of their recent new loans customers will use the funds for refinancing purposes.

By Pulse

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]