Internet-only banks, regional lenders expand alliances to corporate lending

Korea’s internet-only banks and regional lenders are expanding their co-lending partnerships beyond consumer credit into corporate lending, as they each look for new ways to grow their businesses, industry officials said Monday.

KakaoBank and Busan Bank are preparing to launch a joint lending program for small and medium-sized businesses and sole proprietors, following a memorandum of understanding signed in April. The arrangement will combine KakaoBank’s nationwide digital platform with Busan Bank’s experience in assessing and managing business loans in its regional market.

Until now, most co-lending partnerships between the two parties have focused on consumer credit.

Toss Bank and Kwangju Bank introduced the industry’s first joint loan in 2024, followed by similar offerings from Kbank and Busan Bank, and from KakaoBank and Jeonbuk Bank in 2025. All three programs targeted salaried workers.

Their expansion into business lending marks the next step.

The incentives for both sides are clear. For internet-only banks, which have relied heavily on household lending, working with regional lenders gives them a way to build experience and data in business lending as a new engine of growth.

KakaoBank has recently been stepping up its push into corporate lending. Its outstanding loans to sole proprietors stood at 3.69 trillion won ($2.67 billion) at the end of the second quarter, up 284 billion won from three months earlier.

Regional banks, meanwhile, can tap the nationwide platforms of their digital counterparts to reach customers beyond their traditional geographic markets.

“The partnership with KakaoBank will provide an opportunity to develop a new financial model that combines traditional corporate lending with an online platform,” a Busan Bank official said.

Their move also coincides with a shift in how companies are financing themselves.

Rising global government bond yields have pushed up borrowing costs across corporate bond markets, making it more expensive for companies to raise money directly from the market. More firms, therefore, are turning to bank loans, which offer relatively lower rates.

General corporate bond issuance totaled 25.9 trillion won in the first half of this year, down 31.5 percent from a year earlier, according to data from the Financial Supervisory Service.

In contrast, half-year reports from the country’s four major financial groups — KB, Shinhan, Hana and Woori — show that their combined credit exposure to six conglomerates — Samsung, SK, Hyundai Motor, LG, Hanwha and Lotte — rose 12.9 percent to 109.7 trillion won from a year earlier.

The figures suggest that as companies scale back their reliance on the bond market, bank financing is becoming more attractive for businesses with investment and funding needs.