Household Loan Growth Plummets Amid Interest Rate Hikes... Bank Sector Increased by 3 Trillion in November

Financial Market Trends Announcement on the 8th

[Asia Economy Reporter Jang Sehee] Due to regulatory measures on loans and interest rate hikes by authorities, the increase in household loans in the banking sector significantly slowed down last month. Loan demand, avoiding regulations, shifted to the secondary financial sector.

According to the 'Financial Market Trends' announced by the Bank of Korea on the 8th, as of the end of November, the outstanding balance of household loans at banks was 1,060.9 trillion KRW, an increase of 3 trillion KRW compared to the end of October.

The increase amount is more than 2 trillion KRW less than October's (5.2 trillion KRW) and less than half compared to September's (6.4 trillion KRW).

Looking at the changes in household loans by type, mortgage loans including jeonse deposit loans (outstanding balance of 776.9 trillion KRW) increased by 2.4 trillion KRW over the month. The increase is only about 50% of October's (4.7 trillion KRW) and marks the lowest monthly figure in 3 years and 9 months since February 2018 (1.8 trillion KRW).

Of the increased 2.4 trillion KRW in mortgage loans, jeonse deposit loans accounted for 2 trillion KRW. Other loans, including unsecured loans, increased by 500 billion KRW over the month.

Park Sungjin, Deputy Head of the Market General Team at the Bank of Korea's Financial Market Department, explained, "The increase in general mortgage loans decreased due to seasonal factors and a decline in housing transactions, and the increase in group loans also decreased due to repayments of interim payment loans."

Regarding the trend in household loans, he said, "To determine whether the increase in household loans has slowed down, we need to observe whether this trend stabilizes a bit more."

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