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/ KakaoBank, K-Bank, Toss Bank

As regulations on household lending become protracted, dark clouds are gathering over the growth outlook for internet-only banks. Because their business structures are heavily tilted toward household loans, securing growth momentum through conventional methods has become difficult. In response, the three internet-only banks—KakaoBank, K-Bank, and Toss Bank—are seeking to build new revenue foundations and overcome growth limitations through distinct survival strategies.

According to the Korea Exchange on the 15th, KakaoBank's share price closed at 20,100 won on that day, down 8.2% from the beginning of the year. This contrasts with the shares of South Korea's four major financial holding companies rising an average of 25.9% over the same period. On the same day, K-Bank also finished trading at 5,140 won, down 38.3% compared to its closing price on its first day of listing (March 5).

This is interpreted as a reflection of concerns regarding the growth potential of internet-only banks. Unlike traditional commercial banks, their business structure is concentrated on household loans, meaning prolonged government lending regulations have restricted credit expansion. In fact, household lending across all financial sectors in September decreased by 2.2 trillion won from the previous month, shifting to a decline for the first time since December of last year. In particular, the decline in unsecured personal loans widened from 400 billion won in August to 3 trillion won in September. Furthermore, the requirement to continue their policy mandate of supplying credit to mid-to-low credit borrowers is also cited as a constraint on growth.

Against this backdrop, internet banks are moving away from their traditional reliance on household loans and accelerating efforts to secure new revenue sources. However, the ways they secure growth drivers differ. KakaoBank is diversifying its growth foundation by expanding not only loan products but also its platform business and customer base. Alongside rolling out non-face-to-face final installment loans for new apartments and expanding loans for sole proprietors, it strengthened platform services such as auto finance comparisons and gold savings. This month, it launched dedicated financial services for foreign nationals, broadening its customer acquisition target to foreign residents in South Korea.

K-Bank has made financing for sole proprietors its new lending growth engine. To target demand for operating funds, it expanded the collateral scope for mortgage loans for sole proprietors from apartments to other multi-family housing, multi-unit commercial buildings, and studio officetels, while also expanding loan purposes to include facility funds. Following its earlier introduction of loan products linked with guarantee agencies, it also released credit cards tailored to sole proprietors, strengthening its lineup of financial products aimed at business-owner clients.

Toss Bank is focusing on widening touchpoints with customers by bolstering everyday financial services. It expanded its foreign exchange transaction scope through overseas remittance services and released a series of products practical for daily life, such as foreign currency piggy banks and debit cards offering public transportation perks. In addition, it launched installment savings accounts incorporating gaming elements into the savings process, encouraging customers to use its financial services on a continuous basis.

Market analysts view that how the diversification strategies pursued by internet banks will translate into future earnings amid prolonged household loan curbs will be key. Na Min-wook, an analyst at DB Financial Investment, said, "The impact of household lending regulations is expected to continue next year as well," adding, "Accordingly, launching new products and shifting portfolios toward sole proprietors are expected to become increasingly critical."

                                                                                                             Yoo Su-jeong