Household Loans Surge by 25.4 Trillion Won in April... Impact of 'SKIET IPO and Samsung Family Inheritance Tax Loans'

Increase of 16.1 trillion won compared to the previous month's growth margin

[Asia Economy Reporter Jin-ho Kim] Due to the SKIET IPO subscription frenzy and inheritance tax loans related to the late Chairman Lee Kun-hee, the increase in household loans last month surged significantly compared to the previous month.

According to the 'Household Loan Trends in April 2021' announced by the Financial Services Commission on the 12th, total household loans across all financial sectors last month surged by 25.4 trillion KRW compared to the end of the previous month.

Although the increase in mortgage loans narrowed compared to the previous month, other loans including credit loans rose sharply. Mortgage loans recorded 5.2 trillion KRW, a decrease of 1.3 trillion KRW from 6.5 trillion KRW in the previous month. On the other hand, other loans including credit loans increased by 17.2 trillion KRW to 20.2 trillion KRW from 3 trillion KRW in the previous month.

It was analyzed that the demand for funds related to the SKIET IPO subscription had a significant impact. The subscription deposit for SKIET reached 80.9 trillion KRW.

However, the Financial Services Commission explained that other loans such as credit loans sharply decreased this month following the IPO subscription and refund schedule. According to the FSC, on the SKIET subscription days of the 28th and 29th of last month, bank credit loans increased by about 9.6 trillion KRW, but decreased by 7.8 trillion KRW on the 3rd of this month (refund day).

The stock-collateralized loan (about 700 billion KRW) received by Vice Chairman Lee Jae-yong and others to prepare for the late Chairman Lee Kun-hee's inheritance tax amounting to 12 trillion KRW was also analyzed as a cause of the surge in household loans last month.

Accordingly, the year-on-year growth rate of total household loan balances across all financial sectors recorded 10.0%, expanding from 8.5% in the previous month.

By sector, bank household loans increased by 16 trillion KRW last month, a scale that rose by 9.5 trillion KRW compared to 6.5 trillion KRW in the previous month. Household loans in the secondary financial sector also increased by 9.4 trillion KRW, mainly due to insurance policy loans, surging by 6.4 trillion KRW compared to the previous month.

The Financial Services Commission explained that last month's household loans temporarily expanded mainly in other loans such as credit loans due to the influence of IPO subscriptions.

An FSC official said, "Despite the reduction in mortgage loans, credit loans increased significantly in both banks and secondary financial sectors, but most were repaid on the 3rd, and the current increase in household loans has turned to a decrease," adding, "We will closely monitor household loan trends and implement household debt management measures without fail."