Household loans again rise in Oct. despite tightened rules, higher rates

Despite the tightening of borrowing regulations and higher interest rates, household loans by major South Korean banks surged again in October, according to data released on Monday. The total outstanding household loans at the five largest lenders -- KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank -- reached 783.6 trillion won ($584 billion) by the end of October, marking an increase of 2.77 trillion won compared to the previous month.

This uptick in household loans came a month after a decline for the first time in six months. The growth was primarily driven by a rise in both mortgage and credit loans. Mortgage loans, which saw the most substantial increase, grew for the seventh consecutive month in October, reaching 623.99 trillion won at the end of the month. Credit loans also saw a climb, increasing by 669 billion won to 108.89 trillion won over the same period.

The Bank of Korea (BOK) maintained its benchmark interest rate at 3 percent for the third consecutive month, announcing the decision on October 20. The central bank's decision to keep rates unchanged followed two consecutive rate hikes in July and August, aimed at preemptively addressing potential inflationary pressures and ensuring macroeconomic stability, given ongoing tensions in the Middle East and strong export performance.