Credit extended by South Korea's four largest financial holding companies to major conglomerate groups rose about 13% over the past year, driven by growing funding demand in sectors making large-scale investments, such as defense and shipbuilding, semiconductors and artificial intelligence.
The combined credit and exposure of KB, Shinhan, Hana and Woori financial groups to the six largest debtor groups — Samsung, Hyundai Motor, SK, Hanwha, Lotte and LG — stood at 109.7 trillion won ($79 billion) at the end of June, up 12.9% from 97.1 trillion won a year earlier, according to financial industry sources on the 25th.
Hanwha Group posted the largest increase. Credit and exposure from the four financial groups to Hanwha rose 32.7% to 20.8 trillion won from 15.68 trillion won. All four financial holding companies increased their credit to the group.
Credit to Hyundai Motor Group also rose 15.9% to 16.81 trillion won from 14.5 trillion won, while SK Group expanded 11.1% to 21.98 trillion won from 19.78 trillion won. The three groups accounted for 9.63 trillion won of the increase alone.
In absolute terms, Samsung Group was the largest. Credit and exposure from the four financial groups to Samsung reached 23.22 trillion won at the end of June, the highest among the six groups. That was up 10% from 21.12 trillion won a year earlier, surpassing 23 trillion won. Lotte Group rose 5.6% over the same period, while LG Group edged down 0.2%, remaining virtually unchanged from a year earlier.
Analysts say funding through the financial sector is expanding, centered on companies that require large-scale capital over long periods. Hanwha is ramping up investment in defense and shipbuilding, Hyundai Motor in future mobility, and SK in semiconductors and AI. A financial industry official said the sustained demand for large-scale capital investment and working capital appears to have driven up borrowing from financial firms alongside corporate bonds.
