"Stock Surge Spurs Rise in 'Bittu' Investments: May Bank Other Loans See Biggest Increase in 5 Years"

Household Bank Loans Up by 6.9 Trillion Won in May
Largest Increase Since August 2024 (Up 9.2 Trillion Won)
Other Loans Rise by 3.7 Trillion Won
"Significant Impact from Leveraged Stock Investments"

Household loans from banks increased by nearly 7 trillion won in May. The main driver behind this growth was other loans. Even considering that other loans typically rise in May due to increased household demand during Family Month, the increase was significant. Analysts attribute this surge in part to individuals borrowing to invest in stocks—known as “Bittu” (investing with borrowed money).

According to the “Financial Market Trends in May 2026” released by the Bank of Korea on June 11, the outstanding balance of household loans from banks at the end of last month stood at 1,181.8 trillion won. This reflects an increase of 6.9 trillion won in May alone, marking the largest monthly rise since August 2024 (when loans rose by 9.2 trillion won).

Other loans grew by 3.7 trillion won. This is the biggest jump since April 2021 (up 11.8 trillion won), when large-scale IPOs by major conglomerates took place. As a result, the outstanding balance of other loans at the end of May reached 240.2 trillion won. Park Mincheol, Deputy Head of the Market Supervision Team at the Financial Markets Department of the Bank of Korea, explained, “The significant increase was driven by a combination of large-scale stock investments by individuals and seasonal demand for funds during Family Month.” Mortgage loans also rose by 3.2 trillion won, reaching 940.8 trillion won. The pace of growth accelerated due to increased housing transactions—mainly in the mid- to low-priced segments in the Seoul metropolitan area—and higher demand for interim payments on units already pre-sold, even as jeonse (long-term rental deposit) loans continued to decline.

Experts say it is difficult to predict the trend for this month, given the high level of uncertainty in the housing market and growing volatility in the stock market. Park noted, “Housing-related loans are linked to trends in the real estate market, but currently, market uncertainty remains high.” He also pointed out that the scale of other loans will continue to fluctuate depending on movements in the stock market.

There are also warnings against the expansion of leveraged investments amid continued sharp fluctuations in the market. Park stated, “Last month, as individuals absorbed funds from foreign investors’ portfolio rebalancing and profit-taking, the so-called ‘money move’ intensified. Much of this was facilitated through credit loans and other bank loans, fueling leveraged and debt-based investments.” He added, “While such borrowing is a personal investment decision, it is important to note that if there is an external shock that triggers a market correction, forced selling could amplify stock price volatility.”

On the 11th, an employee is monitoring the stock market and exchange rates in the dealing room at the headquarters of Hana Bank in Jung-gu, Seoul.

Last month, bank loans to corporations increased by 10.6 trillion won. Loans to small and medium-sized enterprises grew by 5.4 trillion won, as banks continued to expand productive business lending. Loans to large corporations rose by 5.2 trillion won due to ongoing lending activities by banks and increased demand for working capital to repay corporate bonds.

The volume of corporate bonds continued to show net repayments (down 1.1 trillion won), as companies turned to alternative financing sources such as bank loans due to the increased burden of issuing bonds amid rising interest rates.

In May, bank deposits shifted to an increase, rising by 48.8 trillion won. Demand deposits soared by 32.8 trillion won, largely due to some major corporations placing short-term surplus funds in banks, which more than offset the outflow of household funds. Time deposits also increased by 15.8 trillion won, as banks attracted more corporate funds to secure funding for loans and manage regulatory ratios, despite withdrawals by households.

Assets under management at asset management companies jumped by 86.4 trillion won, led by equity funds. Equity funds increased sharply for a second month in a row, rising by 58.8 trillion won, driven by higher stock prices and continued inflows of new investment (7.6 trillion won). Evaluation gains from rising domestic and international stock prices contributed to the substantial growth. Other funds (up 21 trillion won) also grew significantly, mainly due to derivative funds (up 14.7 trillion won). Money market funds (MMFs) rose by 1.8 trillion won, mainly driven by corporate funds.

This content was produced with the assistance of AI translation services.