Last Month, Credit Loans at 5 Major Banks Increased by Only About 200 Billion KRW Compared to Previous Month
Government Strengthens Loan Regulations, Impacting Loan Interest Rate Rise
[Asia Economy Reporter Kiho Sung] The outstanding balance of unsecured loans at the five major banks increased by 203.3 billion KRW in March. Considering that the monthly increase limit for unsecured loans set by financial authorities is 2 trillion KRW, this is regarded as relatively stable management.
According to the banking sector on the 1st, the outstanding balance of unsecured loans at the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?was recorded at 135.3877 trillion KRW last month. This is an increase of 203.3 billion KRW compared to 135.1844 trillion KRW at the end of February.
The slowdown in the increase of unsecured loans is due to banks raising the threshold for unsecured loans. Additionally, as the stock market has been in a correction phase this year, demand for 'debt investment' (bit-tu, borrowing to invest) and 'all-in' (young-kkeul, pulling together all resources) has cooled down.
In fact, although the KOSPI index surpassed the 3,200 mark at the beginning of this year, reaching an all-time high, it soon entered a correction phase after repeated fluctuations. According to the Korea Exchange, the average daily trading value in the domestic stock market (KOSPI + KOSDAQ) in March was 26.2202 trillion KRW. This average daily trading volume decreased by 37.7% compared to January (42.0965 trillion KRW) and by 19% compared to February (32.3692 trillion KRW). Compared to December last year (52.4865 trillion KRW) and November (42.5828 trillion KRW), it decreased by 50% and 38.4%, respectively. On the 15th, the KOSPI's daily trading value was 12.5809 trillion KRW, the lowest this year.
However, there is speculation that demand for unsecured loans may surge as a 'last chance' before the financial authorities announce household debt measures this month. The financial authorities have set a goal to reduce the household loan growth rate, which soared to 8% annually last year, to 4-5% annually within the next 2-3 years, continuing strong management and supervision of the banking sector. However, ahead of the household debt management measures announcement next month, demand for last-minute loans may increase.
Household loans increased by 3.3652 trillion KRW from 678.1705 trillion KRW in February to 681.6357 trillion KRW in March. Mortgage loans rose by 3.0424 trillion KRW from 480.1258 trillion KRW in February to 483.1682 trillion KRW in March. Loans to individual business owners also increased by 2.4861 trillion KRW, reaching 277.9909 trillion KRW in March compared to 275.5048 trillion KRW in February.
A banking sector official said, "Unsecured loans are being managed stably due to the stock market correction and other factors," but added, "We are closely monitoring market conditions as loan demand may surge ahead of the household debt measures announcement."
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