Korean banks across the U.S. recorded over $1.3 billion in Small Business Administration (SBA) loans during the 2024 fiscal year. This marks a rebound in loan volume after a two-year decline, as it increased from $1.1 billion in 2023.

According to the SBA's 2024 fiscal year loan performance data (October 2023 – September 2024) released on October 8, 14 Korean financial institutions nationwide, including Southern California, posted a total of $1.35 billion in SBA (7a) loans, with a total of 1,190 loans issued. The average loan amount per transaction for Korean financial institutions exceeded $1 million, at $1,137,353. This increase in SBA loans is attributed to businesses recovering from the economic impact of COVID-19 and actively seeking SBA loans again. The return of SBA loan growth, a major revenue source for Korean financial institutions, is expected to improve their overall performance.

Korean banks ranked at the top among Asian banks in terms of loan volume. Among the six Korean banks headquartered in Southern California, Bank of Hope took first place, issuing $245.29 million in loans. This made Bank of Hope not only the leading Korean bank but also the top Asian bank in the U.S.

Open Bank ranked second with $180.26 million in loans. Hanmi Bank and CBB Bank followed with $147.45 million and $137.44 million, respectively. PCB Bank ranked sixth with $98.36 million, and US Metro Bank came in tenth with $73.94 million. All six Southern California-based Korean banks were listed among the top 10 Korean banks. In terms of the number of loans, Bank of Hope also led with 283 loans, followed by Hanmi Bank (151), Open Bank (115), CBB Bank (113), and PCB Bank (99).

The increase in loan volume for the 2024 fiscal year reaffirmed the strength of Korean financial institutions in the SBA loan sector. Out of the 1,465 financial institutions that issued loans nationwide, 10 Korean institutions ranked among the top 100.

Korean financial institutions continue to focus on SBA loans because the SBA guarantees up to 75% of the loan amount for 7(a) loans, which minimizes the risk of loss from bad loans. Additionally, SBA loan portfolios can be bundled and traded between financial institutions, making them a key source of revenue.

However, experts predict that while SBA loans will gradually recover, significant growth is unlikely due to the Federal Reserve maintaining relatively high interest rates despite beginning to lower them. On the national lender ranking, Newtek Bank took the top spot with $2.098 billion in loans, followed by Live Oak Banking with $1.983 billion, and Huntington National Bank with $1.042 billion.

By Hwandong Cho

<Hwandong Cho>