May Household Loans Decrease by 1.8 Trillion Won... Impact of Credit Loan Repayments

Increase in Mortgage Loans Also Slightly Reduced
Household Loan Monthly Balance Decreases for the First Time in 7 Years and 4 Months

[Asia Economy Reporter Kim Jin-ho] Last month, household loans across all financial sectors decreased by 1.8 trillion won. This was due to the large-scale repayment of unsecured loans following the refund of subscription deposits for SK IE Technology (SKIET) public offering shares, which attracted the largest-ever subscription deposits.

According to the "May Household Loan Trends" announced by the Financial Services Commission on the 10th, household loans across all financial sectors decreased by 1.8 trillion won last month. Considering that the increase in April reached 25.4 trillion won, this is a noticeable decline. It is the first time in 7 years and 4 months since January 2014 (-2.2 trillion won) that the monthly household loan balance has decreased.

Both mortgage loans and unsecured loans, including other loans, significantly decreased compared to the previous month. As of the end of May, the year-on-year growth rate of household loan balances across all financial sectors also fell to 9.6% from 10% in the previous month.

Mortgage loans increased by 4.5 trillion won last month, narrowing from 5.2 trillion won in the previous month. The main cause was the decline in housing transaction volume. Nationwide housing sales transactions last month were 93,000 units, down from 102,000 units in the previous month. In the case of unsecured loans, the refund of SKIET public offering subscription deposits in early May led to a decrease of 5.3 trillion won. The decrease in other loans, mostly unsecured loans (balance of 276 trillion won), was the largest since related statistics began in 2004.

By financial sector, household loans in the banking sector decreased by 1.5 trillion won. The secondary financial sector also saw a decrease of 300 billion won. Both were influenced by the reduced increase in mortgage loans and the repayment of unsecured loans due to the refund of SKIET subscription deposits.

A Financial Services Commission official explained, "Loans that temporarily surged due to public offering subscriptions decreased in May due to the refund of subscription deposits," adding, "We will continue to closely monitor household loan trends and prepare thoroughly to ensure that the 'Household Debt Management Plan' is implemented consistently."

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