K Bank, the partner bank of Upbit’s Korean won account, has reported a record high overdue rate of 1.28% for personal credit loans linked to virtual assets in the third quarter of this year. According to data from the Financial Supervisory Service of the National Assembly of South Korea, the overdue balance reached 47.4 billion won.
Rising Overdue Rates and Balances
Since the introduction of virtual asset-linked accounts in June 2020, K Bank has seen a steady increase in overdue rates and balances. Low- and medium-credit customers have been particularly affected, with an overdue rate of 2.2%, more than three times that of high-credit customers.
The Double-Edged Sword of Virtual Asset Market Boom
While K Bank has benefited from the recent boom in the virtual asset market, its over-reliance on Upbit is seen as a potential risk. The increase in investor deposits has generated revenue for the bank, but regulatory adjustments have also led to a significant increase in interest expenses. The volatility and uncertainty of the virtual asset market may further impact the bank’s asset quality.
Comparison with Competitors
K Bank’s non-yielding loan balance reached 207.2 billion won in the third quarter of 2023, significantly higher than its competitors Kakao Bank and Toss Bank. Analysts suggest that K Bank needs to reduce its overall delinquency rate by increasing mortgage loans or loans to high-credit customers to improve asset quality and pave the way for its planned IPO.
Note: This article is for informational purposes only and does not constitute investment advice.
Source: Panewslab.com
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