Household Loans of 5 Major Banks Surpass 700 Trillion Won... Only NongHyup Shows Growth Slowdown

[Asia Economy Reporter Park Sun-mi] The outstanding household loans at the five major commercial banks have surpassed 700 trillion won. NongHyup Bank, which was the first to halt new mortgage loans, was the only bank to see a decrease in household loan balances.

According to the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup?as of the end of last month, the outstanding household loan balance reached 702.8877 trillion won, surpassing 700 trillion won for the first time.

The household loan balance increased by 4.0728 trillion won compared to 698.8149 trillion won at the end of August. The increase was larger than the 3.5067 trillion won rise in August. Among the five major commercial banks, only NongHyup Bank saw a decrease in household loan balances compared to the previous month. This was the result of strong measures such as halting new mortgage loans to manage the total volume of household loans. However, other banks experienced an increase in loan balances due to a 'balloon effect.'

The outstanding mortgage loan balance at the five major banks was 497.4174 trillion won, up 4.0026 trillion won from 493.4148 trillion won at the end of August. This also marked the largest monthly increase, exceeding the 3.8311 trillion won increase in August. This is interpreted as reflecting some demand to secure loans before restrictions tighten, as housing prices continue to soar and banks begin tightening lending.

However, the outstanding balance of unsecured loans at the five major banks stood at 140.9999 trillion won, increasing by only 105.7 billion won from 140.8942 trillion won at the end of August. Unsecured loans remained at a similar level to July’s 140.893 trillion won. Banks have reduced unsecured loan limits to about 100% of annual income, and most overdraft limits have been capped at 50 million won.

As banks have successively tightened lending, the household loan growth rate at the five major banks as of the end of September is approaching 5% compared to the beginning of the year, leading to widespread expectations that lending will become even more restricted toward the end of the year. Financial authorities have instructed commercial banks to manage this year’s household loan growth rate within 5-6% and are considering additional regulations to curb the rapidly increasing household debt.

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