Household Loans at Five Major Banks Jump by 6.7 Trillion Won in June, Largest Increase in 10 Months

Last month, household loans at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) recorded their largest increase in ten months. This was mainly due to a significant rise in loan demand, particularly as housing prices surged in Seoul. Although the government implemented regulations on June 28, limiting the maximum amount of mortgage loans to 600 million won, the upward trend is expected to continue for the time being due to loans that had already been submitted before the new rules took effect.

According to the financial sector on July 1, the outstanding balance of household loans at the five major banks stood at 754.8348 trillion won as of the end of June. This represents an increase of 6.7536 trillion won compared to the end of the previous month, when the balance was 748.0812 trillion won. The increase is 1.7572 trillion won higher than the previous record for this year, which was 4.9964 trillion won in May, and it is the largest monthly increase in ten months since the all-time high of 9.6259 trillion won in August of last year.

The main driver of the rise in household loans was mortgage loans. The outstanding balance of mortgages in June reached 599.425 trillion won, an increase of 5.7634 trillion won compared to May. This is also the largest monthly increase in nine months since September of last year, when the increase was 5.9148 trillion won.

Credit loans also grew by 1.0876 trillion won in June, marking the largest increase since July 2021, when the increase was 1.8637 trillion won. This was due to a combination of increased demand for so-called "debt investment" as the stock market rose, as well as demand for funds to purchase homes.

In contrast, corporate loans showed a decline. The outstanding balance of loans to large corporations fell by 5.7668 trillion won to 165.6516 trillion won compared to May. Loans to small and medium-sized enterprises also decreased by 2.6543 trillion won from the previous month.

The balance of time deposits at the five major banks stood at 931.9343 trillion won, a decrease of 8.9332 trillion won compared to the previous month.