Business · Economy · 2 hrs ago
83% of South Korea’s latest industrial loan growth went to the capital region
South Korea’s capital region took 83.2% of industrial loan growth in the year to the second quarter of 2026.
The region includes Seoul, Incheon and Gyeonggi, and held 67.69% of all industrial loans at the end of that quarter, its highest share since 2010.
The figures cover business loans as well as public and other industrial lending, counted by the location of the bank branch that issued them.
The government has introduced measures to direct more finance to other regions, but weak regional demand and banks’ risk concerns have limited the shift.
Lending is also becoming more concentrated among large companies: at four major banks, loans to large firms rose 16.2% year on year by June, compared with 3.2% for small and medium-sized firms.
The article links stronger manufacturing loan demand partly to the semiconductor boom, while noting that firms outside the sector face tougher conditions.
Regional and company-size gaps are widening even as business lending grows.
South Korea’s capital region received 83.2% of the increase in industrial loans over the year to the second quarter of 2026.
The region held 67.69% of the country’s industrial loan balance at the end of that quarter, the highest share since the third quarter of 2010.
Loan growth also favored large companies: lending by four major commercial banks to large firms rose nearly five times as fast as lending to small and medium-sized businesses.
The article attributes the regional concentration to weak demand for investment and borrowing outside the capital region and banks’ efforts to manage credit risk.
Government measures to encourage regional lending have not so far reversed the trend.
- Who
- South Korean banks and businesses, with lending concentrated in the capital region and among large companies.
- What
- Industrial loan growth was heavily concentrated in the capital region, which accounted for 83.2% of the increase over the year to the second quarter of 2026.
- When
- At the end of the second quarter of 2026; the year-on-year comparison covers the period from the second quarter of 2025.
- Where
- South Korea, particularly Seoul, Incheon and Gyeonggi Province.
- Why
- The article cites weak business investment and borrowing demand outside the capital region and banks’ concerns about credit soundness.
This story does not have two clearly opposing sides.
The government announced measures to increase the regional supply of policy finance and encourage regional lending by easing loan-to-deposit ratio rules.
South Korea’s industrial loan balance increased by 84.36 trillion won, of which 70.20 trillion won went to the capital region.
The government expanded its targets for the regional supply of policy finance.
The capital region held 67.69% of industrial loans, while the four major commercial banks’ lending to large companies was up 16.2% year on year.
- Capital-region share of annual loan growth
- 83.2%
- Capital-region industrial loan balance
- 1,039.24 trillion won
- National industrial loan balance
- 1,535.37 trillion won
- Four major banks’ large-company loans
- 156.35 trillion won; up 16.2% year on year
- Four major banks’ small and medium-sized business loans
- 559.55 trillion won; up 3.2% year on year
What people are saying
The economy is so bad, and local banks, whose main customers are regional small and medium-sized businesses, have relatively weaker soundness indicators, so they are in a position where they cannot readily increase lending.
As interest rates have risen, large companies have increasingly sought to raise funds through bank loans rather than issuing corporate bonds.