Sejong, January 21, 2026 — South Korea’s Fair Trade Commission (KFTC) said it has sanctioned four major commercial banks for exchanging and using information related to loan-to-value (LTV) ratios in a way that restricted competition in the real estate secured lending market.
The KFTC imposed corrective orders prohibiting the conduct and levied total administrative fines of KRW 272 billion (approximately $185 million) on KB Kookmin Bank, Shinhan Bank, Woori Bank, and Hana Bank, according to a commission statement.
The authority said the banks exchanged “all information” related to real estate collateral recognition ratios — a key transaction condition in mortgage-backed lending — and used the information in the market, limiting competitive pressure between lenders.
LTV ratios determine the percentage of a property’s value that a bank will recognize as collateral when providing a loan. The KFTC described the ratio as an important condition affecting the broader terms of mortgage-backed transactions, including the loan amount available, interest rates, and the level of service provided to borrowers.
According to the authority, when LTV ratios fall, borrowers may be able to access less financing against a given property. This can make it harder for borrowers to raise sufficient funds at the desired scale. The KFTC added that consumers may face worsened conditions if they need to provide additional collateral or rely on unsecured credit loans that typically carry higher interest rates.
The authority highlighted that small and medium-sized businesses and small merchants can be particularly exposed to such changes. It said these borrowers often have relatively lower credit ratings compared with large companies, limiting their ability to raise funds through unsecured credit lending and making it harder to offer additional collateral. As a result, the KFTC said these groups have a high reliance on collateralized loans and may be significantly affected by the level at which banks set LTV ratios.
The KFTC noted that banks set LTV ratios for real estate nationwide, based on location and type, and adjust them when necessary. The authority framed the exchange and use of such information between major lenders as conduct that restricted competition in mortgage-backed lending.
The KFTC said the sanctions include both the fines and an order to stop the unlawful conduct.
