Last Month, Top 5 Banks' Credit Loans Plummet by 3.7 Trillion Won, Household Loans Brake Applied
First Household Loan Decrease Since February 2017
[Asia Economy Reporter Park Sun-mi] Last month, household credit loans at the five major commercial banks sharply declined, putting the brakes on household loans. This is the first time since February 2017 that the balance of household loans has decreased.
According to the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?household loan balances last month stood at 687.8076 trillion won, down 3.0546 trillion won from 690.8622 trillion won in April. This is the first time since February 2017 that the household loan balance has decreased month-on-month.
Although the balance of mortgage loans increased by 1.2343 trillion won from April to 485.1082 trillion won, the credit loan balance decreased by 3.7366 trillion won from April to 138.4911 trillion won, resulting in an overall reduction in household loan size.
The Financial Services Commission’s strengthened household loan management measures, set to be fully implemented in July, have pressured borrowers’ debt burdens just by their announcement. Additionally, the possibility of interest rate hikes within the year and rising household loan interest rates are considered factors influencing this trend.
Moreover, the cooling enthusiasm for public offering stocks and coin investments is also putting a brake on the 'Yeongkkeul' and 'Debt Investment' mentality. In fact, demand deposit balances, which strongly represent short-term standby funds for investment, recorded 654.6185 trillion won last month, down 6.4055 trillion won from April.
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Meanwhile, money is flowing back into bank time deposit accounts, which had previously seen funds drain away like a receding tide. The balance of time deposits at the five major banks at the end of last month was 624.3555 trillion won, an increase of 9.5564 trillion won compared to the end of April.
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