Household Credit Balance Surpasses 1,600 Trillion Won at the End of Last Year

[Asia Economy Reporter Eunbyeol Kim] At the end of last year, household credit balance surpassed 1,600 trillion won. The year-on-year household credit growth rate, which seemed to have slowed down, expanded again. Household loan balance exceeded 1,500 trillion won.

According to the 'Household Credit in Q4 2019' released by the Bank of Korea on the 25th, as of the end of December last year, the household credit balance was recorded at 1,600.1 trillion won. This is an increase of 63.4 trillion won (4.1%) compared to one year ago. Compared to the previous quarter, it increased by 27.6 trillion won (1.8%).

The household credit growth rate (year-on-year) had surged to 11.6% in Q4 2016 and then showed a slowing trend, dropping to 3.9% in Q3 last year. However, in Q4 last year, the year-on-year household credit growth rate rose again to the 4% range.

At the end of Q4 last year, the household loan balance was 1,504.4 trillion won, an increase of 23 trillion won (1.6%) compared to the previous quarter. Compared to the same period last year, it increased by 57.8 trillion won (4.0%). The household loan growth rate also rose, similar to household credit.

Deposit banks saw an expanded increase in other loans, but the increase in mortgage loans decreased, resulting in a total increase of 17 trillion won, down from 18.7 trillion won in the previous quarter. Non-bank deposit-taking institutions saw a decrease in mortgage loans but an expanded increase in other loans, turning into an increase of 500 billion won.

Other financial institutions saw both mortgage loans and other loans increase, switching from a decrease of 3.3 trillion won in Q3 to an increase of 5.5 trillion won in Q4.

Song Jae-chang, team leader of the Economic Statistics Bureau at the Bank of Korea, said, "Compared to 2016, the slowing growth trend continues," adding, "This is believed to be due to the government's household debt stabilization policies steadily slowing the increase in household loans."

He also said, "Regarding housing transactions after the 12·16 Housing Market Stabilization Measures, there is inevitably a time lag of 2 to 3 months for interim payments and final payments," adding, "The policy effects need to be observed further."

This content was produced with the assistance of AI translation services.