May Bank Corporate Loans Increase by 13.1 Trillion Won... More Than Double Compared to Previous Year

Last month, bank corporate loans increased by more than 13 trillion won due to COVID-19 financial support, demand for facility funds, and banks' efforts to handle corporate loans.

According to the "Financial Market Trends in May" released by the Bank of Korea on the 10th, bank corporate loans increased by 13.1 trillion won last month, showing a larger increase compared to the previous month (12.1 trillion won). Compared to May of last year (5.7 trillion won), the loan volume more than doubled.

Excluding 2020, when loan volumes temporarily surged significantly in response to COVID-19 (16 trillion won), this is the highest level since the related statistical flash estimates began in June 2009.

Loans to small and medium-sized enterprises (7.8 trillion won → 8.9 trillion won) continued to increase due to ongoing COVID-19 financial support and demand for facility funds, while loans to large corporations (4.4 trillion won → 4.3 trillion won) also showed a strong increase due to demand for working capital.

Corporate bonds shifted to net repayment as both issuance and investment demand slowed due to widening credit spreads.

Last month, bank household loans (including policy mortgage loans) increased by 400 billion won. Although the increase in housing-related loans slowed, the decrease in other loans narrowed, resulting in a slight increase following the previous month’s 1.2 trillion won rise.

Housing mortgage loans saw continued demand for jeonse loans, but the increase in funds related to home purchases slowed, reducing the growth from 2 trillion won in April to 800 billion won in May.

Other loans decreased by 500 billion won in May, narrowing from a 900 billion won decrease in April. The Bank of Korea explained, "Despite ongoing government loan regulations and rising loan interest rates, the decrease narrowed due to banks' efforts to strengthen credit loan operations."

Bank deposits last month surged from 6.6 trillion won in April to 27.8 trillion won.

Demand deposits increased due to the inflow of local government funds related to loss compensation payments for small business owners affected by COVID-19 quarantine measures, and time deposits (3.8 trillion won → 19.5 trillion won) also increased due to inflows of private and local government funds.

Government bond yields rose due to accelerated normalization of domestic and foreign monetary policies and global inflation concerns, while short-term market interest rates increased significantly due to the impact of the base rate hike.

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