Local banks, under pressure to scale back consumer lending to households and individuals, are scrambling to find alternative ways of managing their rising assets by expanding loan services to small and medium-sized enterprises (SMEs), industry sources said yesterday.
The banks are “having some difficulty in managing their assets," said an analyst at Hyundai Securities. "The SME loan segment is less lucrative compared to household loan sector, but it is deemed to be attractive to banks."
For one, Kookmin Bank (KB), Korea's biggest lender in terms of assets, extended 965 bn won (US$818 m) to SMEs last month, bringing its total SME exposure to 37.71 trillion won in outstanding loans.
The lender's loan extension to large companies fell by 65.2 bn won to 6.62 trillion won last month, while household loans increased by 67.6 bn won to 74.38 trillion won over the cited period.
Source: Korea Herald
