Korea's four largest banks — KB, Shinhan, Hana and Woori — will remain resilient through the second half of 2026, navigating economic shifts and a regulatory and policy agenda. Strong risk controls and government support will prevent severe stress. Although the government's "productive-finance" push and a weak won erode capital buffers modestly, eased regulations and steady earnings will preserve sound capital. Good underwriting mitigates severe stress The asset quality of the four banks will be resilient through the second half of 2026 despite moderate deterioration. Risks stem from domestic and global uncertainties, government-led inclusive-finance initiatives and a "productive-finance" policy which leads to riskier corporate lending despite rising loan delinquencies. Financial stress persists for small businesses and the self-employed amid rising rates, particularly in sectors related to local real estate. Backed by active nonperforming loan (NPL) management and government support for weaker borrowers, 2026 gross NPL ratios should be broadly comparable with 2025, averaging about