South Korea’s Fair Trade Commission (FTC), chaired by Joo Byung-ki, has imposed fines totaling KRW 272 billion (€180 million) on the country’s four largest commercial banks—Kookmin Bank, Shinhan Bank, Woori Bank, and Hana Bank—for allegedly colluding on real estate loan-to-value (LTV) ratios. The regulator also issued an injunction banning the banks from continuing the practice.
The FTC found that the banks repeatedly exchanged internal documents related to LTV ratios and coordinated lending limits between March 2022 and March 2024. LTV ratios, which determine how much of a property’s value can be used as collateral for a loan, are a key regulatory tool used to curb household debt. By aligning these ratios, the banks reduced competition, stabilizing operating profits and limiting consumers’ ability to choose among lenders. Together, the four banks account for approximately 60% of South Korea’s mortgage loan market.
“Borrowers had little choice but to face limited options when selecting a bank,” said Moon Jae-ho, a senior FTC official. “It is realistically difficult to determine precisely how much damage was suffered as a result of the collusion.”
The FTC noted that the practice particularly harmed small and medium-sized enterprises (SMEs) and small business owners, who typically have lower credit ratings and rely heavily on secured loans. Collusive decisions on LTV ratios limited their ability to access financing, often forcing them to provide additional collateral or seek more expensive funding options.
The regulator also estimated that the interest earnings generated through the practice amounted to roughly KRW 6.8 trillion over the two-year period. The case marks the first enforcement under the revised Fair Trade Act, which came into effect on December 30, 2021, introducing new provisions banning the exchange of sensitive business information for anti-competitive purposes.
Lee Sun-mi, a senior FTC official, highlighted the scale of the collusion: “From a minimum of 736 cases to a maximum of 7,500 cases, the four major banks repeatedly exchanged detailed information on their LTV ratios over a long period whenever necessary.”