After financial authorities raised this year's target for managing the growth rate of total household lending from 1.5 percent to 3 percent, NH Nonghyup Bank resumed handling variable-rate home mortgage loans after two and a half months. Attention is focused on whether the threshold for mortgages will be lowered across the banking sector.

However, the COFIX based on newly issued loans in July rose to 3.18 percent, up 0.13 percentage points from the previous month. That marked a fourth straight monthly rise, increasing the interest burden for borrowers with variable-rate mortgages.

The government decided to supply 3 trillion won a year of the "Youth Future Home Loan" to support young people buying non-apartment homes. But debate over its effectiveness continues, as 97 percent of last year's Youth Home Loan usage by young people was spent on buying apartments.

Financial support aimed at mid-to-low credit borrowers and small business owners is spreading across the financial sector.

Banks are increasing the supply of mid-interest loans for mid-to-low credit borrowers, while fintech firms are moving to improve access by lowering brokerage costs for policy-backed microfinance for the lowest-credit borrowers. Mutual financial institutions are also expanding low-interest loans linked to local governments and local credit guarantee foundations, broadening support targets from mid-to-low credit borrowers to small business owners and small enterprises.

• First signs of easing household lending rules... NH Nonghyup Bank resumes mortgages • COFIX rises for a fourth straight month... variable mortgage rates to rise again • For non-apartment support "youth home loan" to be effective... • Shinhan Bank launches "Super SOL mid-interest loan" for mid-to-low credit borrowers • Toss cuts brokerage fee for savings bank "Sunshine Loan special case" by 16 percent • Saemaul Geumgo to support low-interest loans worth 200 billion won for small business owners

In the financial sector, discussions on relocating public institutions outside Seoul and moves to expand regional financial hubs have both gathered pace.

As expectations grow that the government could soon present the broad framework for a second plan to relocate public institutions to regional areas, possible relocation targets being mentioned include policy lenders such as Korea Development Bank, Industrial Bank of Korea and Export-Import Bank of Korea, as well as the Financial Services Commission and the Financial Supervisory Service.

In particular, financial sector labour groups have opposed relocating to regional areas and have warned of a general strike, heightening tensions over the issue of moving financial institutions.

Against that backdrop, the Financial Services Commission finalised an evaluation plan for designating Jeonbuk as a financial hub. It decided to review whether to designate it within this year after a document review and on-site inspection by an evaluation panel of 12 experts.

Jeonbuk has seen the four major financial holding groups successively build bases in the Jeonbuk Innovation City around the National Pension Service, raising expectations of designation as a "third financial hub" following Seoul and Busan.

Moves by financial firms to deepen their regional ties have also continued, with Hana Bank joining hands with Incheon to expand financial support for young people, ordinary citizens and small business owners, as well as to foster future strategic industries.

Hana Financial Group is creating a 200 billion won "Incheon Unicorn Fund" and Hana Bank will be responsible for discovering promising startups, showing regional financial support expanding beyond simple funding into industrial and corporate development.

• Is relocation to regions imminent... financial sector "abuzz" • Financial Services Commission finalises Jeonbuk financial hub evaluation plan... to review designation within the year • Will Jeonbuk achieve its "financial hub" dream... evaluations begin in earnest as financial bases are built one after another • Hana Bank to expand Incheon livelihood and future industry financial support... creates 200 billion won unicorn fund

As discussions on introducing a won stablecoin gather pace, voices are emerging that securing actual merchants and distribution networks is important for market adoption. In the finance and fintech industries, moves are continuing to pre-empt related infrastructure such as payments and custody.

In the payments industry, companies are working to secure a basis for real-world use, such as linking existing payment gateway and prepaid payment infrastructure with stablecoins or connecting global digital asset wallets with payment networks.

Some companies are joining the global stablecoin ecosystem or conducting technical verification assuming an actual payment environment, preparing for the possibility of commercialisation after institutionalisation.

Banks are also expanding their business foundations that can connect traditional finance and digital assets through steps such as investing in stakes in digital asset custodians.

As custodians that completed registration acceptance as virtual asset service providers have also emerged, related infrastructure such as digital asset storage and transfer for corporate and institutional clients is expanding.

Partnerships between banks and virtual asset exchanges for real-name verified deposit and withdrawal accounts are also continuing, and existing financial infrastructure supporting won trading is also being maintained and expanded.

Along with discussions on institutionalising a won stablecoin, interest in the finance and fintech industries is expanding beyond issuers to overall infrastructure to support real-world use, including payments, distribution and custody.

• "A won stablecoin's success depends on real use and distribution networks" • Danal joins the ecosystem of global stablecoin "Open USD" • Sh Suhyup Bank secures a 14.95 percent stake in Infinitblock... expands digital asset business • BitGo Korea's VASP registration accepted... first case for a global company • NHN KCP to push stablecoin payment linkage with LINE NEXT • KakaoBank-Coinone extend real-name account contract by 1 year • Korea Payment Networks obtains prepaid business licence... completes stablecoin payment proof of concept

Mergers and acquisitions led by insurers have continued, and reshaping of non-bank portfolios has also begun in earnest. As financial groups successively bring life and non-life insurers into their fold and move to integrate affiliate insurers, moves are becoming more pronounced to reduce dependence on banking and strengthen non-bank competitiveness. A combined life insurer with total assets of 55 trillion won is also scheduled to launch in the second half of next year.

Along with business reshuffles by financial firms, moves by financial authorities to strengthen risk management and consumer protection have continued. After preventing 66.36 billion won in losses over 9 months by sharing suspected voice phishing information among financial, telecommunications and investigative agencies, authorities will pursue a survey of the status of mule accounts and institutional improvements across the entire financial sector.

System improvements to enhance financial market stability also continued. As the margin exchange system to manage system risk in non-cleared over-the-counter derivatives transactions was extended, the number of financial companies subject to initial margin requirements from September will increase to 143 from 138.

In the mutual financial sector, disposal of bad assets and restructuring are being pursued in parallel. Saemaul Geumgo sold 3.4783 trillion won of non-performing loans in the first half and merged 21 local cooperatives, accelerating management of delinquency rates and the cleanup of weak cooperatives to improve soundness.

• Financial sector "M&A competition" heats up again... insurers bought one after another • Woori Financial to combine Tongyang and ABL Life... insurer with 55 trillion won in total assets to be launched • Financial authorities block 66.36 billion won in voice phishing... to also fix mule accounts • More financial firms to be subject to OTC derivatives margin rules... 143 companies from September • Saemaul Geumgo sells 3.4783 trillion won of bad loans in first half... merges 21 local cooperatives

As torrential rain caused a series of losses in southern regions including South Gyeongsang Province, the financial sector also moved to provide emergency recovery support.

The four major financial groups, KB, Shinhan, Hana and Woori Financial, donated 500 million won each, totalling 2 billion won, for flood recovery in South Gyeongsang Province. They also provided financial support through affiliates in banking, cards and insurance.

The four major banks also supported affected residents and small business owners and small and medium-sized companies with emergency living stability funds and business loans of up to 500 million won, as well as interest rate benefits and repayment deferrals.

Industrial Bank of Korea also delivered 200 million won, and donations and financial support for affected customers continued across the financial sector.

• Four major financial groups donate 500 million won each for South Gyeongsang flood recovery... mobilise financial support • Four major banks provide financial support for heavy rain damage in southern regions... loans up to 500 million won • Shinhan Bank delivers 200 million won for South Gyeongsang flood recovery and support for evacuees • Industrial Bank of Korea donates 200 million won for recovery from torrential rain damage

Other major moves in the finance and fintech industries were also summarised.

KB Financial Group expanded ESG finance in the environment segment to 20.8 trillion won and strengthened green finance with a goal of reaching 25 trillion won by 2030. KB Kookmin Bank introduced an installment savings product offering an annual interest rate of up to 12.0 percent depending on card usage performance, and Shinhan Bank launched a mid-interest loan for mid-to-low credit borrowers and a loan exclusively for "Ddaenggyeoyo" merchants, widening the scope of financial support for ordinary people and small business owners.

• KB Financial Group's environment-segment ESG finance reaches 20.8 trillion won... 25 trillion won goal by 2030 • KB Kookmin Bank launches "KB Card-Use Savings" with annual rates up to 12.0 percent • Shinhan Bank launches "Super SOL mid-interest loan" for mid-to-low credit borrowers • Shinhan Bank launches "Ddaenggyeoyo outstanding merchant loan"... up to 100 million won

Hana Financial Group runs an everyday carbon reduction programme, and Hana Bank expanded foreign exchange market infrastructure by signing a won swap transaction with RFI, saying it was the first among domestic banks. Woori Bank attracted a Korean Treasury bond transaction using a global payment network, and NH Nonghyup Bank strengthened digital and global services by introducing Incheon Airport Smart Pass to "NH All One Bank". Industrial Bank of Korea 추진 pushed 200 billion won of financial support for youth startup companies.

• Hana Financial Group operates "Hana Green Mate" for everyday carbon reduction • Hana Bank signs won swap transaction with RFI... "first among domestic banks" • Woori Bank attracts Korean Treasury bond transactions via "global payment network" in a first for domestic banks • NH Nonghyup Bank introduces Incheon Airport "Smart Pass" to "NH All One Bank" • Industrial Bank of Korea to 추진 provide 200 billion won of financial support for youth startup companies

With KakaoBank deciding to cancel 51 percent of its treasury shares, its union has warned of an all-out general strike for 5 days from the 31st, putting shareholder returns and labour-management issues in the spotlight at the same time. Toss Bank expanded its electronic braille service across all areas of lending, deposits and cards, and K Bank moved to strengthen customer touchpoints by launching a limited-edition check card. Toss also completely revamped its official website, bringing group services and brand information together in one place.

• KakaoBank to cancel 51 percent of treasury shares... remainder for employee compensation • KakaoBank union to stage 5-day all-out general strike from the 31st • Toss Bank expands "electronic braille service" across lending, deposits and cards • K Bank launches 50,000 limited-edition "ONE check card Bonobono edition" • Toss completely revamps official website... reorganises more than 70 pages

In the B2B fintech sector, Kookon posted operating profit of 4.96 billion won in the second quarter, up 6.3 percent from a year earlier. Webcash held an AX seminar for public institution finance and treasury officials and shared AI-based work innovation measures.

• Kookon second-quarter operating profit 4.96 billion won... up 6.3 percent on year • Webcash holds AX seminar for public institution finance and treasury officials

In the alternative finance fintech sector, DailyPay built "R-SDB" to accumulate real-time management data for small business owners, moving to strengthen data-based financial infrastructure. 8percent surpassed 20 million cumulative investments and posted an average annual return of 10.3 percent.

• DailyPay builds real-time small business data repository "R-SDB" • 8percent surpasses 20 million cumulative investments... average annual return 10.3 percent