Bank Household Loan Growth Target '4.5%'... "Borrowing Money Will Be Harder Next Year"

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-seop] Starting next year, borrowing money from major commercial banks is expected to become more difficult. This is because major banks must adhere to lower household loan growth rate targets than this year.

According to the financial sector on the 5th, at the end of last month, major commercial banks set their 2021 household loan growth rate management targets at 4.5~5% to the Financial Supervisory Service. Banks with steep household loan growth set their targets at 4.5%, while those with relatively moderate growth set targets close to 5%.

The banks' decisions appear to follow the management guidelines reportedly presented by the Financial Supervisory Service. Like this year, financial authorities are expected to confirm banks' annual household loan management plans and targets, then finalize the targets through coordination. It is reported that last month, the Financial Supervisory Service delivered a guideline to the banking sector to manage next year's household loan growth rate at an 'average of 4.5%.'

This is 0.5 percentage points lower than this year's household loan growth rate target of 5%. Given the continued demand for loans, there is a forecast that banks' capacity for household loans will inevitably decrease next year.

However, within the financial sector, there is also speculation that the total loan volume may be adjusted slightly depending on each bank's compliance performance with household loan total volume regulations. For banks with high household loan growth rates, the target may be reduced, while banks that have successfully curbed growth may be granted higher targets as a benefit.

Compared to the end of the previous year, NH Nonghyup Bank had the highest household loan growth among the five major commercial banks at 7.10%, followed by Shinhan Bank at 6.30%. Then came KB Kookmin Bank (5.43%), Woori Bank (5.40%), and Hana Bank (4.70%).

Applying the financial authorities' policy of 'exclusion from total volume management of new jeonse deposit loans in the 4th quarter,' the rates were NH Nonghyup Bank (6.90%), KB Kookmin Bank (4.35%), Shinhan Bank (4.10%), Hana Bank (3.90%), and Woori Bank (3.80%).

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