Bank Household Loans Rise As Growth Slows
Bank household loans rose by 5.4 trillion won, or approximately $3.82 billion, last month, marking five consecutive months of growth. While the increase was 2.2 trillion won smaller than the previous month’s gain of 7.6 trillion won, it was still roughly double the 2.7 trillion won recorded in July
Bank household loans in South Korea increased by 5.4 trillion won, or about $3.82 billion, in the previous month, marking the fifth month of growth. While this rise was 2.2 trillion won less than the 7.6 trillion won increase from the prior month, it still doubled the 2.7 trillion won growth seen in July of the previous year. Over the latest three-month period, household loans grew by a combined 19.9 trillion won, suggesting continued strong momentum.
The Bank of Korea reported that the total outstanding balance of bank household loans stood at 1,194.8 trillion won at month-end. Mortgage loans saw a 3.4 trillion won rise, reaching an outstanding balance of 948.4 trillion won, likely reflecting the impact of increased home transactions in the Seoul metropolitan area. However, growth slowed compared to the 4.3 trillion won increase from the prior month due to a decline in jeonse transactions and weaker demand for interim payments.
Other loan categories, such as unsecured credit loans, grew by 2 trillion won to 245.4 trillion won, driven by reduced retail investment in stocks. Corporate lending accelerated, with bank loans to businesses rising by 7.7 trillion won to 1,421.1 trillion won. Small and medium-sized enterprise lending increased by 3.9 trillion won, while large corporation loans grew by 3.8 trillion won.
Meanwhile, direct financing markets saw corporate bonds posting net repayments of 1.9 trillion won, continuing an eight-month decline. Commercial paper and short-term notes saw net issuance of 4 trillion won, while equity issuance increased by 1.5 trillion won. Bank deposits experienced a net decline of 30 trillion won, with demand deposits falling by 80.8 trillion won, marking the largest monthly drop since records began.
This decline was attributed to corporate funds being moved out ahead of quarterly financial ratio management and tax payment demands. Time deposits, however, surged by 42.3 trillion won as banks sought funding for lending and corporations placed surplus cash in fixed-term deposits. The Bank of Korea maintained a cautious outlook, noting that various factors, including housing market conditions and government policies, could impact household lending demand in the coming months.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
