Major financial groups to commit $350 bil. to Lee's productive finance drive

ATMs of major banks are installed in Seoul, Sunday. Yonhap

By Jun Ji-hye

• Published Nov 10, 2025 4:13 PM KST

Push to expand corporate lending raises concerns over banks' asset soundness

Korea’s five major financial groups — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — plan to inject a combined 508 trillion won ($350 billion) by 2030 to expand productive and inclusive finance, industry officials said Monday.

The move aligns with President Lee Jae Myung’s pledge to launch a major financial transformation, aimed at channeling market capital into more productive sectors. Lee has called on financial companies to redirect funds previously tied to real estate or reliant on interest income toward small and medium-sized enterprises (SMEs) and investments in high-tech industries to revitalize the economy.

Woori Financial Group was the first to announce an 80 trillion won investment plan in September, followed by Hana Financial Group with 100 trillion won, NH NongHyup Financial Group with 108 trillion won and both KB and Shinhan Financial Groups with 110 trillion won each.

Part of these commitments will go toward the government’s 150 trillion won National Growth Fund, aimed at fostering key strategic industries such as artificial intelligence, semiconductors, biotechnology, vaccines and robotics over the next five years.

The fund is composed of 75 trillion won from the Korea Development Bank and an additional 75 trillion won in contributions raised from the private, public and financial sectors. Each of the five financial groups is set to contribute 10 trillion won.

The financial groups have also established dedicated organizations to accelerate the shift toward productive finance.

KB Financial Group launched a group-wide productive finance council in September, consisting of 21 senior executives, including subsidiary heads, to set strategic directions, discuss detailed execution plans and assess progress.

Shinhan Financial Group formed an integrated project management office that brings together its key subsidiaries — banking, card, securities, life insurance and capital — holding bimonthly meetings to monitor implementation.

Hana Financial Group established a task force with participation from all affiliates, including banking, securities, card, capital and insurance units, to advance productive and inclusive finance initiatives in phases.

Woori Financial Group operates the advanced strategic industry finance council to regularly review outcomes and has incorporated productive and inclusive finance performance into up to 30 percent of its subsidiaries’ performance evaluations.

NH NongHyup Financial Group plans to elevate its productive finance promotion office, launched last month, to a special committee under the chairman’s direct supervision next year to strengthen cross-affiliate collaboration.

As banks expand corporate lending, however, ensuring financial soundness has become a pressing concern.

Moving away from traditional collateral-based loans, which are considered safer, toward loans that rely less on security and carry higher credit risk is expected to increase the challenge of managing potential defaults.

The delinquency rate on SME loans at four of the major banks — KB Kookmin, Shinhan, Hana and Woori — stood at 0.53 percent in the third quarter, the highest since early 2017 when it was 0.59 percent.

Loans overdue for one to three months also jumped 14.8 percent from 7.11 trillion won at the end of last year to 8.17 trillion won, reflecting the growing difficulties small businesses and self-employed borrowers face in repaying debts amid a prolonged economic slowdown.

“Ongoing programs are aimed at reshaping a real estate–heavy financial system and reinforcing finance’s fundamental role in promoting industrial transformation and sustainable growth,” a banking industry official said. “Maintaining asset quality will remain a key priority.”