The photo shows the in-person service counters at KB Kookmin Bank’s Yeouido branch in Seoul. (Yonhap)
SEOUL, Jan. 21 (Korea Bizwire) — South Korea’s antitrust regulator said Wednesday that it had imposed a combined 272 billion won, or about $184 million, in fines on the country’s four largest commercial banks, accusing them of coordinating restrictions on mortgage lending in a way that undermined competition.
The Fair Trade Commission said Shinhan Bank, Woori Bank, Hana Bank and KB Kookmin Bank unlawfully exchanged internal documents and sensitive business information related to loan-to-value, or LTV, ratios — a key benchmark that determines how much borrowers can borrow against the value of their homes.
By aligning their lending limits, the commission said, the banks effectively narrowed consumer choice in the mortgage market and reduced competitive pressure among lenders.
LTV ratios are one of the government’s primary tools for controlling household debt, setting caps on mortgage borrowing based on property values. While the limits themselves are regulated, the commission said banks retain discretion in how they apply them — discretion that was allegedly compromised through coordination.
According to the regulator, the information sharing took place repeatedly between March 2022 and March 2024, involving anywhere from several hundred to several thousand exchanges of detailed LTV-related data.
Headquarters of the four major commercial banks. Clockwise from top left: KB Kookmin Bank, Shinhan Bank, Woori Bank and Hana Bank. (Yonhap)
“Over an extended period, the four major banks repeatedly shared sensitive information whenever necessary,” said Lee Sun-mi, a senior official at the commission.
The watchdog estimated that the practice generated roughly 6.8 trillion won in interest income, allowing the banks to stabilize profits by reducing uncertainty about competitors’ lending strategies.
Together, the four institutions control about 60 percent of South Korea’s mortgage loan market, giving their parallel behavior an outsized influence on borrowers’ options.
“Consumers were left with little meaningful choice when selecting a lender,” said Moon Jae-ho, another senior commission official, adding that the precise financial harm suffered by individual borrowers was difficult to quantify.
The commission said the effects were especially severe for small and midsized enterprises and self-employed business owners, who typically face weaker credit profiles and therefore rely more heavily on secured loans. For such borrowers, banks’ decisions on LTV limits can determine whether financing is available at all.
The case marks the first enforcement action under revisions to South Korea’s fair trade law that took effect in late 2021, which explicitly prohibit anticompetitive conduct through the exchange of sensitive business information — even in the absence of explicit price-fixing agreements.
The ruling signals a tougher regulatory stance toward coordination in financial markets, as authorities seek to reinforce competition at a time when household debt and access to credit remain central economic concerns.
Ashley Song (ashley@koreabizwire.com)
