April Bank Household Loans Increase by 1.2 Trillion Won... Rise Resumes After 5 Months

[Image source=Yonhap News]

Household loans in the banking sector, which had been declining for four consecutive months due to rising loan interest rates and other factors, turned to an increase for the first time in five months.

According to the 'Financial Market Trends' released by the Bank of Korea on the 11th, the outstanding balance of household loans at banks as of the end of April was 1,060.2 trillion won, an increase of 1.2 trillion won compared to the previous month.

Household loans showed a decline for four consecutive months due to rising interest rates, loan regulations, and sluggish real estate transactions, with decreases of 200 billion won in December last year, 500 billion won in January this year, 200 billion won in February, and 1 trillion won in March.

However, with the continued increase in mortgage loans and a reduction in the decrease of other loans, the balance turned to an increase again as of the end of last month.

Among household loans, mortgage loans increased by 2.1 trillion won. Despite the slowdown in housing sales transactions, demand for jeonse (long-term deposit lease) and group loan funds continued, maintaining the previous month's level.

Other loans also saw a reduction in the decrease from -3.1 trillion won to -900 billion won last month, as the intensity of credit loan management in the banking sector somewhat eased despite ongoing government loan regulations and rising loan interest rates.

Corporate loans in the banking sector also increased significantly last month due to seasonal factors such as temporary repayments at the end of the quarter being re-borrowed and demand for value-added tax payments. The outstanding balance of corporate loans rose by 12.1 trillion won to 1,106 trillion won compared to the previous month. This increase is larger than the 6.3 trillion won in February and 8.6 trillion won in March.

In particular, the increase in corporate loans as of April is the highest on record, excluding 2020 (27.9 trillion won), when loan volumes temporarily surged in response to COVID-19.

Last month, loans to large corporations increased from 900 billion won to 4.4 trillion won, and loans to small and medium-sized enterprises also rose from 7.7 trillion won to 7.8 trillion won.

Corporate bonds turned to net issuance (from -900 billion won to 300 billion won) due to refinancing issuance amid an increase in maturities. In the case of stocks (from 800 billion won to 3.5 trillion won), the issuance scale expanded mainly through paid-in capital increases by companies such as Samsung Biologics.

Bank deposits last month increased by 6.6 trillion won compared to 8 trillion won the previous month, showing a reduced growth rate. Demand deposits decreased from 16.3 trillion won to -4.6 trillion won due to corporate fund outflows for value-added tax payments and dividend payments, while time deposits increased from -3.6 trillion won to 3.8 trillion won as household and local government funds flowed in.

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