Household loans fall as banks maintain tight lending rules: data

Household loans by major South Korean banks declined for the first time in six months in September, as banks maintain strict lending rules, according to financial data released on Sunday. The outstanding household loans at KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH NongHyup Bank amounted to 781.39 trillion won as of Thursday, a decrease of 727.6 billion won from the end of August.

This decline, despite the government relaxing the cap on household loans, occurred as the banks adhered to their self-imposed restrictions on lending, industry officials stated. The five major lenders were granted additional quotas by financial authorities, which raised their annual target for household loan growth from 4.3 trillion won in 2025 to 7.1 trillion won this year.

However, once loan supply resumes, driven by collective lending, mortgage growth is expected to regain momentum in the near future, according to an official from a local bank. Excluding policy loans, outstanding household loans at the five major banks showed a consistent uptrend, increasing by 108.7 billion won from the end of last month.

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