KakaoBank, K Bank surge in small business lending - report

KakaoBank (KRX:323410) and K Bank extended small-business lending at growth rates 70 times higher than the sector average, data from Korea's five largest banks showed Wednesday. Internet-only banks are capturing market share in operator-capital lending, a segment traditional banks have largely retreated from as loan losses and regulatory capital requirements reduced profitability.

KakaoBank and K Bank grew small-business lending 70% year-over-year in the half, compared to 0.4% growth at Korea's top five banks. The internet banks' absolute lending base remains 80 times smaller than the legacy tier, but the growth trajectory is steep.

KakaoBank's market capitalisation was ₩10.4 trillion at Thursday's close. First-half 2026 net income of ₩328 billion set a record for the three-year-old bank. Net interest margins on small-business books typically exceed consumer mortgage margins, but loss rates are higher, creating a trade-off that legacy banks price conservatively.

Regulatory encouragement of fintech lending in this segment reflects policy desire to diversify credit sources for entrepreneurs and ease pressure on traditional financial institutions.

Sources

  1. Chosun Biz
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