May Household Loans Increase by 1.8 Trillion Won... Credit Loans Show First Growth This Year

[Asia Economy Reporter Song Hwajeong] Household loans increased for two consecutive months last month. In particular, credit loans turned to an increasing trend for the first time this year.

According to the 'Household Loan Trends in May 2022' announced by the Financial Services Commission on the 10th, household loans across all financial sectors increased by 1.8 trillion KRW last month. Following an increase of 1.2 trillion KRW the previous month, this marked two consecutive months of growth. The year-on-year growth rate was 3.4%, rising from 3.1% the previous month, halting the slowdown trend that had continued since the second half of last year.

Mortgage loans saw a reduced increase compared to the previous month, but other loans such as credit loans slightly increased for the first time this year. Last month, mortgage loans increased by 1.6 trillion KRW, a smaller increase compared to 2.8 trillion KRW in the previous month. This was influenced by a decrease in bank group loans from 1.1 trillion KRW to 200 billion KRW. Other loans increased by 200 billion KRW, reversing the declining trend that had continued since the end of last year into an increasing trend.

By financial sector, bank household loans showed a reduced increase compared to the previous month, while household loans in the secondary financial sector expanded mainly in credit card companies and savings banks. Last month, bank household loans increased by 400 billion KRW, a smaller increase compared to 1.2 trillion KRW the previous month. Mortgage loans increased by 800 billion KRW, mainly due to jeonse loans (1.1 trillion KRW), but the increase slowed due to a reduced rise in group loans (200 billion KRW). Other loans decreased by 500 billion KRW, mainly credit loans (200 billion KRW), showing a smaller decline compared to 900 billion KRW the previous month. Household loans in the secondary financial sector increased by 1.4 trillion KRW, centered on credit card companies (1 trillion KRW), savings banks (600 billion KRW), and insurance companies (300 billion KRW).

A Financial Services Commission official explained, "Household loans across all financial sectors last month showed a slight increase compared to the previous month, but the stability since the beginning of the year continues. Mortgage loans slightly increased during the month due to ongoing demand for jeonse-related funds, but the increase was smaller than the previous month, and other loans such as credit loans turned to an increasing trend influenced by seasonal factors and fund demand."

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