Savings banks, facing restrictions on household loan growth, have significantly increased corporate lending, particularly to large enterprises, while loans to small businesses have declined. This shift reflects a trend toward restructuring loan portfolios to focus on borrowers with relatively high credit ratings amid enhanced solvency management.
According to the Financial Statistics Information System, the balance of corporate loans from savings banks reached 4.869 trillion won in the first quarter of this year, a 49.8% increase from 3.2495 trillion won in the same period last year. This marks the seventh consecutive quarter of growth since the second quarter of 2024.
Among major savings banks, OK Savings Bank saw its corporate loan balance more than double from 275.6 billion won in the first quarter of last year to 608.5 billion won this year, making it the largest in the industry. DB Savings Bank increased its loans from 250 billion won to 407.5 billion won, while Accuon Savings Bank expanded from 255 billion won to 327.1 billion won.
In contrast, loans to small businesses decreased from 45.0895 trillion won in the first quarter of last year to 43.2931 trillion won this year, a 3.9% decline. The total corporate loan balance of savings banks remains around 48 trillion won, showing little change from a year ago, but the proportion of large enterprise loans rose from 6.7% to 10.1%, an increase of 3.4 percentage points.
Industry experts attribute the increase in corporate lending to the ongoing decline in household loans since the second half of last year, coupled with stricter borrower selection criteria. The persistent burden of non-performing loans due to economic slowdown has made asset quality management a top priority.
As of the end of the first quarter, 32.9% of the 79 savings banks reported a ratio of non-performing loans exceeding 10%. Some large savings banks, such as Welcome Savings Bank (13.72%) and Korea Investment Savings Bank (12.62%), also recorded double-digit non-performing loan ratios, indicating significant asset quality concerns across the sector.
A representative from the savings bank industry stated, "The growth potential for household loans is limited due to regulations, and the risks for self-employed individuals and some small businesses have increased due to the economic slowdown. As a result, savings banks are increasingly opting for large enterprises, which are relatively easier to assess for creditworthiness and collateral."
* This article has been translated by AI.
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