Bank of Korea 'Financial Market Trends in April 2021'
Household Loans Increased by 16.1 Trillion KRW in April, Credit Loans Rose by 11.8 Trillion KRW
[Asia Economy Reporter Kim Eun-byeol] In April, bank household loans increased by 16.1 trillion won, marking the largest increase ever. The surge in household loans was mainly due to a record increase of 11.8 trillion won in unsecured loans (other loans).
According to the "Financial Market Trends for April 2021" released by the Bank of Korea on the 12th, bank household loans rose by 16.1 trillion won last month as demand for funds for public offering subscription surged. This is the largest increase since the Bank of Korea began compiling related preliminary data in 2004.
Mortgage loans increased by 4.2 trillion won, marking the fourth largest increase in April since 2004. Although demand for funds related to housing sales and jeonse (long-term lease) transactions continued, the increase was smaller than the previous month due to a decrease in housing supply, mainly in group loans.
The problem was unsecured loans. Demand to borrow money to invest in SK IE Technology (SKIET) public offering subscriptions surged, causing unsecured loans to increase by 11.8 trillion won. The subscription deposits for SKIET public offering on April 28-29 amounted to approximately 80.9 trillion won.
However, the Bank of Korea analyzed that the surge in demand for public offering subscriptions was temporary. Therefore, it expects the increase in unsecured loans to slow down after the public offering subscription issue subsides.
In April, bank corporate loans expanded significantly compared to the previous month. Corporate loans increased by 11.4 trillion won, with large corporate loans turning to an increase of 2 trillion won due to reissuance of temporary repayments at the end of the quarter. Small and medium-sized enterprise loans expanded from 7.3 trillion won in the previous month to 9.5 trillion won due to continued financial support from banks and policy financial institutions and demand for funds related to value-added tax payments.
Direct financing saw corporate bonds increase by 3.2 trillion won, and the net issuance of commercial paper (CP) and short-term bonds rose from 700 billion won to 2.3 trillion won.
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