Household Loans at Top 5 Banks Surge by 6 Trillion Won in Two Months... Balance Turns Positive Compared to Last Year-End

Household Loan Balances at the Five Major Banks Reach 646.0192 Trillion Won

In the second quarter of this year, household loans at major commercial banks, which had stagnated in the first quarter, have surged rapidly, turning the outstanding balance positive compared to the end of last year.

According to the financial sector on June 21, the total outstanding household loans (excluding policy loans) at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) as of June 18 stood at 646.0192 trillion won. This is an increase of 824.1 billion won compared to the end of last year (645.1951 trillion won).

By the end of the first quarter of this year, with new loans restricted and repayments being made, the balance had decreased by 5.8688 trillion won from the end of the previous year, reaching 639.3263 trillion won. However, as of this month, the trend has reversed to an increase. Compared to the end of April, when the balance was 639.9475 trillion won, the current figure is about 6 trillion won higher.

Given the sharp pace of growth, there is analysis that banks could exceed the annual household loan growth target of 4.33 trillion won submitted to the financial authorities. The five major banks have set a goal for this year to keep the increase in household loans from exceeding 4.33 trillion won compared to the end of last year, but now only about 3.5 trillion won of room is left. It is reported that some banks have already exceeded, or are likely to exceed, their household loan balance targets.

A booming stock market and rising housing prices are cited as factors rapidly increasing the balances of unsecured and mortgage loans. As of June 18, the outstanding balance of personal credit loans at the five major banks was 108.3339 trillion won, an increase of nearly 4 trillion won from the end of April (104.3413 trillion won). The balance of personal credit line loans (minus accounts) continued to grow, standing at 39.6675 trillion won at the end of April, 41.489 trillion won at the end of May, and 42.7919 trillion won as of June 18.

As home sales are rising, especially in the Seoul metropolitan area, the outstanding balance of mortgage loans also reached a record high of 614.5352 trillion won. This is an increase of 1.1472 trillion won from the end of May.

Banks, concerned about potential penalties related to next year’s household loan growth targets due to exceeding this year’s limits, have begun to strengthen their total volume management. KB Kookmin Bank now limits personal credit loans and minus accounts to 100 million won and 50 million won, respectively. Shinhan Bank restricts new credit loan applications when daily volumes exceed internal management standards. Hana Bank has reduced the credit loan limit to 100 million won for high-income earners. Nonghyup Bank restricts enrollment in mortgage insurance (MCI) and mortgage guarantees (MCG), and also limits credit loans to 100 million won.

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