K bank earns AA+ long-term credit rating, matching KakaoBank

NICE Investors Service on Nov. 2 assigned K bank (CEO Choi Woo-hyung) a new long-term credit rating of AA+ with a stable outlook. The rating is one notch above the AA (stable) that Toss Bank received on Oct. 30 and on par with KakaoBank, the largest internet-only bank in Korea. The upgrade reflects K bank's successful transition to profitability by diversifying its portfolio beyond household unsecured credit loans into loans to sole proprietors.

The key driver behind the rating is stronger capital buffers from its listing on the main KOSPI market. K bank raised 249 billion won (about $184 million) in fresh capital through its IPO in March. In addition, funds previously injected by financial investors through capital increases were newly recognized as regulatory capital, significantly improving capital adequacy. As of end-June, K bank's Bank for International Settlements (BIS) capital ratio stood at 20.0%, above the 17.6% average of Korea's five largest commercial banks.

Potential support from its parent group and largest shareholder also contributed positively to the rating. BC Card was K bank's largest shareholder with a 31.2% stake as of end-June. NICE Investors Service noted that K bank shares KT Group infrastructure to solidify its business foundation and that financial support from its largest shareholder would be available if needed. As a result, K bank received a final rating one notch above its standalone credit profile.

Stable earnings generation also received high marks. After turning profitable in 2021, K bank expanded its balance sheet by increasing the share of guaranteed loans such as mortgage loans and jeonse deposit loans. As of end-June, total loans stood at 19.786 trillion won (about $15 billion) and deposits at 26.6 trillion won (about $20 billion), reaching the mid-tier level among regional banks. After posting a net profit of 113 billion won (about $83 million) last year, the bank reported 60.1 billion won (about $44 million) in the first half of this year, maintaining a steady growth trajectory.

However, the high share of loans to mid-to-low credit borrowers is seen as a key challenge going forward. As of end-June, such loans accounted for 30.8% of K bank's portfolio, higher than at commercial banks. Korean financial authorities plan to gradually raise the target for internet-only banks' new mid-to-low credit lending to 32% next year and 34% in 2027, which could increase credit costs. The substandard-or-below loans (NPL) ratio stood at 0.6% and the loan-loss provision coverage ratio at 261.3% as of end-June, indicating sound asset quality for now, but risks remain that accumulated debt repayment burdens from the rate-hiking cycle could materialize with a lag.

The soft landing of loans to sole proprietors, which K bank is pursuing as a new growth avenue amid tightening household loan regulations, is seen as a key factor for defending future profitability. The share of sole proprietor loans in K bank's portfolio surged from 7.1% at end-2025 to 16.7% at end-June 2026. Entering the corporate finance market is an essential step for further growth, but given the relatively short track record of internet-only banks, K bank must prove its credit evaluation model sophistication and loss containment capabilities to the market. How well it defends asset soundness indicators during the expansion of sole proprietor lending will be a key gauge of its ability to maintain its strong credit rating and long-term success.

(Dollar figures are approximate, converted automatically at 1,000 won = $0.738, the rate on Nov. 8, 2026.)

※ This article is an AI translation of the Korean original published by Korea Credit News; it was checked by automated quality guards and published by the English edition desk.