'Triggered Anxiety' Major Banks' November Credit Loans Surge by 5 Trillion Won... 'Record High'

Last-Minute Rush Before Credit Loan Regulations Take Effect
Record High Volume Since August... 2 Trillion in Just the Last Four Days

Reference image of bank loan counter (Source=Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] Personal credit loans at major commercial banks increased by nearly 5 trillion won last month, marking the largest increase on record.

According to the banking sector on the 1st, the outstanding balance of credit loans at the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 133.6925 trillion won at the end of last month, up 4.8495 trillion won from 128.8431 trillion won at the end of October.

The outstanding balance of credit loans at the five banks had increased by 4.0705 trillion won in August, setting a record for the largest increase, but a new record was set after three months.

This is analyzed to be due to a rush of "last-minute demand" ahead of the credit loan regulations that took effect on the 30th of last month. Credit loans at these banks increased by about 2 trillion won in just four days from the 27th to the 30th of last month.

Under the newly implemented regulations, high-income earners with an annual income of 80 million won or more who seek credit loans exceeding 100 million won from banks will be subject to a Debt Service Ratio (DSR) of 40%.

The DSR is the ratio of the borrower's annual debt repayment amount to their income. Previously, the DSR 40% regulation applied only to bank loans secured by homes valued over 900 million won in regulated areas.

Additionally, if a borrower takes out a credit loan exceeding 100 million won and purchases a home in regulated areas such as speculative zones or speculative overheating districts within one year, the loan will be recalled.

Ahead of the strengthened loan regulations, the surge in loan demand at banks also explains why the number of overdraft accounts reached an all-time high.

The number of newly opened overdraft accounts at the five major banks on the 1st (one day) was 6,681 on the 23rd of last month. This is 3.5 times the 1,931 accounts opened on the 12th of last month, just before the announcement of the credit loan regulations.

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