- Published 2026.10.30 17:19
First long-term corporate credit rating secured five years after launch
Improved earnings power but rated lower than KakaoBank
Asset soundness management needed amid growing mid-to-low credit loans
Internet-only bank Toss Bank has obtained a corporate credit rating from a credit rating agency for the first time in five years since its launch. Its rapid growth centered on household unsecured credit loans and improved profitability after turning to a profit in 2024 were highly evaluated. However, it was assigned a rating one notch lower than industry leader KakaoBank, and managing the asset soundness of mid-to-low credit borrower loans, whose share it must continue to increase under financial authorities' regulations, is cited as a key task to be addressed going forward.
NICE Investors Service said on Oct. 30 that it newly assigned Toss Bank a long-term credit rating of AA/Stable. This is the result of a one-notch upward adjustment considering the possibility of government support relative to Toss Bank's standalone creditworthiness. NICE Investors Service judged that Toss Bank has policy importance within the financial system, having secured more than 10 million customers and household loans exceeding 14 trillion won (about $10 billion).
Toss Bank has grown rapidly since beginning operations in October 2021 on the back of strong customer acquisition. As of the end of June 2026, total credit extended stood at 15.6 trillion won (about $12 billion) and deposit liabilities at 27.1 trillion won (about $20 billion), securing a business scale comparable to mid-tier regional banks. In particular, after successfully turning to a profit in 2024, its earnings power has improved significantly thanks to expanded interest income and eased credit costs. In the first half of 2026, its net interest margin (NIM) was 2.6%, exceeding the average of major commercial banks, and its return on assets (ROA) rose from 0.2% in 2024 to 0.4% in the first half of 2026.
However, a gap still remains compared with the credit rating of industry leader KakaoBank. KakaoBank obtained an AA+ rating from NICE Investors Service in 2022 and has maintained it to date. Toss Bank's shorter operating history and relatively smaller loan book compared with KakaoBank mean its earnings structure stability has not been fully verified, which is interpreted as leading to the one-notch lower rating.
The relatively high share of mid-to-low credit borrower loans is pointed out as a major limitation. Toss Bank is meeting the target share of 30% for unsecured credit loans to mid-to-low credit borrowers in line with the purpose of establishing internet-only banks, but as a result, its credit costs are heavy, with loan-loss expenses reaching 518.5 billion won (about $383 million) in 2024. Loans originated in the early stage of operations also experienced deterioration in soundness over time, but the bank recently defended its soundness indicators by expanding low-risk credit such as Korea Housing Finance Corporation-guaranteed jeonse deposit loans and selling non-performing loans. As a result, its substandard-or-below loans (NPL) ratio stabilized at 0.9% as of the end of June 2026.
As financial authorities plan to gradually raise the target share of new unsecured credit loans to mid-to-low credit borrowers from 30% in 2025 to 35% by 2028, the risk of increased credit cost burdens remains. Whether Toss Bank can successfully increase the share of collateralized and guaranteed credit, such as the mortgage loans it newly launched this year, to slow the growth of risk-weighted assets and defend asset soundness is expected to be a key indicator for gauging its long-term growth.
(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.
