Hana Bank Grants Monthly Handling Limits to Loan Recruiting Corporations
New mortgage loans through loan brokers, a major channel for loan applicants, are expected to become more stringent. Commercial banks are strongly driving total loan volume management by assigning new loan limits to each loan brokerage corporation. Recently, about half of new mortgage loans have been made through loan brokers, leading to loan brokers being identified as a new trigger for household debt.
According to the financial sector on the 24th, Hana Bank reportedly assigned loan limits to each loan brokerage corporation through an official notice the day before.
A Hana Bank loan broker stated, "Currently, new loans through loan brokers are not possible, and loan inquiries can only be made through branches."
Loan brokers refer to loan consultants and loan brokerage corporations entrusted by banks to perform tasks such as loan application consultation, reception, and transmission.
Hana Bank said, "The assignment of new loan limits to each loan broker is for stable household loan management and does not mean a suspension of handling."
On the same day, a KB Kookmin Bank loan consultant also informed, "New loans will not be handled as the monthly limit is exhausted early until December." As a result, new loans through loan brokers at commercial banks have effectively become impossible.
In response, KB Kookmin Bank stated, "There is no plan to suspend loans through loan brokers," adding, "Loans are managed within the annual target range, so while the volume of applications may be adjusted depending on the period, loans are not blocked."
Previously, Shinhan, Woori, NH Nonghyup, and IBK Industrial Bank had suspended mortgage loan applications through loan brokers in the metropolitan area or nationwide. Shinhan Bank announced on the 27th of last month that it would temporarily suspend loan broker applications for mortgage loans, jeonse deposit loans, and collective balance loans. Shinhan Bank expanded the loan broker restriction areas nationwide, including the metropolitan area. Woori Bank also suspended mortgage loans, jeonse loans, and move-in funds loans through loan brokers nationwide until the end of this year. NH Nonghyup Bank's loan limits through loan brokers have been exhausted early until the end of this year, effectively blocking broker loans. An NH Nonghyup Bank official said, "Loans are possible through branches or mobile channels, and broker loans are only possible if there are cancellations from customers after the limits are fully used."
The decision by commercial banks to suspend loans through brokers is interpreted as an effort to curb the increase in household debt. In particular, as the amount of new mortgage loans handled through loan brokers is known to exceed 70%, loan brokers have been identified as a new trigger for the increase in household debt.
As of August, the balance of newly handled mortgage loans at the five major domestic commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) was 23.0135 trillion KRW, of which 11.4942 trillion KRW (49.9%) was loans issued through loan brokers. The average daily new mortgage loan amount, excluding the Chuseok holiday in September, was 385.4 billion KRW, marking an all-time high.
Even if loans through brokers are suspended, loans are still possible at branches, but some banks plan to intensify comprehensive loan tightening measures, such as having the headquarters rather than branches review new loan applications. Since last month, Shinhan Bank has had a dedicated team at headquarters review new mortgage loan applications instead of branches. Additionally, to suppress loan demand, further interest rate hikes have been implemented. Nonghyup Bank raised interest rates on unsecured loans, responding to concerns that demand shifted to unsecured loans due to the balloon effect of mortgage loans. The preferential interest rates applied to unsecured loans were reduced by 0.1 to 0.3 percentage points. IBK Industrial Bank also raised mortgage loan interest rates by 0.55 percentage points and jeonse loan interest rates by 0.3 percentage points.
A commercial bank official said, "Although the increase in mortgage loans is slowing, considering that housing transactions peaked in July and August, the increase in mortgage loans is expected to continue until November," adding, "While the household debt management policy is maintained, banks are given autonomy, so there is a limit to raising interest rates due to criticism of interest profiteering. Ultimately, it seems that the loan broker sales channel was blocked."
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