Due to High-Intensity Loan Regulations... Household Loans Decrease for 2 Consecutive Months, Credit Loans Decline for 3 Consecutive Months

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-seop] Household loans at major banks decreased for the second consecutive month as the financial authorities' high-intensity debt measures overlapped with the interest rate hike trend. It is an unusual phenomenon for the scale of household loans at large banks to continuously shrink.

According to the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?as of the end of last month, the balance of household loans was recorded at 705.9373 trillion KRW. This is a decrease of 1.7522 trillion KRW compared to the previous month’s 707.6895 trillion KRW. After shrinking from 709.0529 trillion KRW in December last year to 707.6895 trillion KRW in January, it decreased again.

The balance of mortgage loans also decreased by 165.7 billion KRW from the previous month, recording 506.6524 trillion KRW. This is the first decrease in about five years since a 946.7 billion KRW drop in February 2017.

The balance of unsecured loans also fell by 1.1846 trillion KRW to 135.8575 trillion KRW, marking the third consecutive month of decline.

However, jeonse deposit loans increased by 1.4259 trillion KRW to reach 130.9411 trillion KRW. This appears to be due to active jeonse transactions during the moving season despite rising interest rates and a decrease in real estate transactions.

Regular savings and demand deposits increased by 250 billion KRW and 16.6599 trillion KRW respectively compared to the previous month, reaching 3.47992 trillion KRW and 701.3421 trillion KRW. Money Market Deposit Accounts (MMDA) stood at 122.2234 trillion KRW, increasing by 7.2516 trillion KRW.

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