Sharp Surge in Household Loan Growth in October
Slower Growth in Both Mortgage and Policy Loans
Increase in Other Loans Including Card Loans and Cash Advances
In October of this year, household loans across all financial sectors increased by 4.8 trillion won, with the pace of growth accelerating compared to the previous month. Although the growth in mortgage loans and policy loans slowed following the October 15 real estate measures, the main driver of the overall increase was a rebound in credit loans.
According to household loan trends for October released by the Financial Services Commission on November 13, household loans from all domestic financial sectors rose by 4.4 trillion won last month. This represents an increase of 3.3 trillion won compared to September (+1.1 trillion won), indicating an acceleration in the growth rate.
Specifically, the increase in mortgage loans slowed, while other loans shifted to an upward trend. Last month, mortgage loans grew by 3.2 trillion won, a reduction from the previous month (+3.5 trillion won). In the secondary financial sector, the increase was similar to the previous month at 1.1 trillion won.
Other loans, including credit loans such as card loans and cash advances, increased by 1.6 trillion won, reversing the previous month's decline of 2.4 trillion won. Credit loans, in particular, switched from a decrease of 1.6 trillion won in September to an increase of 900 billion won in October.
By sector, household loans from banks increased by 3.5 trillion won, up from the previous month's increase of 1.9 trillion won. Bank-originated mortgage loans rose by 1.1 trillion won, with the growth pace slowing from the previous month (+1.4 trillion won). Policy loans also increased by 900 billion won, a slower pace compared to the previous month (+1 trillion won). In contrast, other loans increased by 1.4 trillion won, reversing the previous month's decline of 500 billion won.
Household loans in the secondary financial sector increased by 1.3 trillion won, shifting from a decline of 800 billion won in the previous month to an upward trend. Both insurance companies (from -300 billion won to +100 billion won) and specialized credit finance companies (from -1.1 trillion won to +200 billion won) reversed to an increase compared to the previous month. Mutual finance institutions (from +1 trillion won to +1.1 trillion won) saw an expanded growth rate, while savings banks (from -500 billion won to -200 billion won) saw a reduction in the pace of decline.
Regarding the expansion in household loan growth, the Financial Services Commission analyzed, "This was mainly due to a turnaround in loans from the secondary financial sector (+1.3 trillion won) compared to the previous month's decline of 800 billion won, and a temporary increase in group loans as more housing development projects executed interim payment loans in October."
The commission added, "Interim payment loans are amounts for which the execution schedule was determined at the time of loan agreement, and considering that the growth in general mortgage loans from banks continues to slow, the impact of household loans on the real estate market remains limited."
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