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S. Korean loans via internet banking surge in Q3

Staff Writer |
South Korean loans, made by internet banking, surged in the third quarter on the launch of online-only banks.

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Loans applied via internet banking services posted a daily average of 181.9 billion won ($167 million) in the July-September quarter, up 78.8 percent from the previous quarter, according to the Bank of Korea (BOK).

The number of internet banking loans was 14,800 during the quarter on a daily average basis, up 72.4 percent from the prior quarter.

The fast growth came as K Bank, the country's first online-only bank, was launched in April. Kakao Bank, the second internet-only bank, started operation in late July.

KaKao Bank was set up by Kakao Corp., the operator of South Korea's most-used mobile messenger Kakao Talk. It helped rapidly spread the loan application through internet banking services.

As the internet banks provide services only online, they do not require an investment in office space and associated staff, reducing operating costs and passing on the reduced costs to higher savings rate and lower loan rate.

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