CreditSights reports that South Korea’s top four lenders faced a difficult first quarter in 2026, with loan growth remaining stagnant between 0.4% and 1.4% compared to the previous quarter. This modest expansion was fueled primarily by corporate lending, which helped offset a slight dip in household loans triggered by more stringent mortgage lending standards.
Profitability remained resilient for Kookmin Bank, Shinhan Bank, and KEB Hana Bank, as they benefited from improved net interest margins and robust fee income from the equity markets. In contrast, Woori Bank experienced a 2% drop in profit, largely due to a significant one-time provision related to its operations in Indonesia.
Despite the earnings boost for most, asset quality showed signs of deterioration across the board. Non-performing loan (NPL) ratios climbed by 5 to 10 basis points relative to the final quarter of 2025, a trend driven by rising corporate defaults and increased delinquency rates in credit card portfolios.
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