Bank of Korea's 'February Financial Market Trends'
Increase Narrowed Due to Lunar New Year Bonuses
Corporate Loans Rise Mainly for Small and Medium Enterprises
Bank household loans increased by 2 trillion won last month, continuing an 11-month streak of growth. However, the increase was smaller than the previous month (+3.3 trillion won) as some credit loans were repaid due to the inflow of holiday bonuses during the Lunar New Year. While mortgage loans maintained their growth trend, the decrease in other loans widened.
According to the "Financial Market Trends in February 2024" released by the Bank of Korea on the 13th, bank household loans (including policy mortgage loans) increased by 2 trillion won in February compared to the previous month.
The scale of increase in bank household loans had been shrinking from 6.7 trillion won in October last year, 5.4 trillion won in November, and 3.1 trillion won in December, before slightly expanding to 3.3 trillion won in January this year.
Looking at the components of household loans, mortgage loans and other loans, the increase in mortgage loans slightly decreased from 4.9 trillion won in the previous month to 4.7 trillion won. On the other hand, the decrease in other loans expanded from 1.5 trillion won in the previous month to 2.7 trillion won in February.
Won Ji-hwan, Deputy Head of the Market General Team at the Bank of Korea’s Financial Market Department, explained, “Although there was increased demand for jeonse (key money) loans, the scale of increase in mortgage loans slightly shrank due to reduced apartment move-in volumes and fewer business days. The decrease in other loans expanded as credit loans were repaid following the inflow of holiday bonuses.”
Bank corporate loans increased by 8 trillion won in February, expanding the growth compared to the previous month (+6.7 trillion won). This is the second largest increase since the related statistical flash report began in June 2009, following February 2021 (+8.9 trillion won). Among these, loans to large corporations increased by 3.3 trillion won, a smaller increase than the previous month (5.2 trillion won). Loans to small and medium-sized enterprises (SMEs) increased by 4.7 trillion won, significantly expanding compared to the previous month (1.5 trillion won).
Deputy Head Won added, “Loans to large corporations continue to show steady growth, mainly for working capital, while loans to SMEs have expanded significantly as corporate facility funds and holiday fund demand coincided with banks’ loan expansion strategies.”
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