The "Family Month" Effect Leads to First Increase in Credit Loans in May This Year

[Asia Economy Reporter Song Hwajeong] Last month, credit loans showed an increase for the first time this year. This was due to increased household fund demand driven by the 'Family Month' effect.

According to the Financial Services Commission on the 12th, other loans across all financial sectors increased by 200 billion KRW last month, centered on credit loans, reversing the declining trend that had continued since the end of last year. Other loans decreased by 2.4 trillion KRW in December last year, followed by decreases of 3.5 trillion KRW in January, 2.9 trillion KRW in February, 6.5 trillion KRW in March, and 1.6 trillion KRW in April this year.

Although the increase in mortgage loans narrowed compared to the previous month, other loans including credit loans rose, resulting in a 1.8 trillion KRW increase in household loans across all financial sectors last month. This marked a consecutive two-month increase following a 1.2 trillion KRW rise in the previous month. The year-on-year growth rate was 3.4%, up from 3.1% in the previous month, halting the slowdown trend that had persisted since the second half of last year.

Mortgage loans increased by 1.6 trillion KRW last month, narrowing from 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, turning the declining trend since the end of last year into an increasing trend.

By 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 in the previous month. Mortgage loans rose by 800 billion KRW, mainly due to jeonse loans (1.1 trillion KRW), but the increase in group loans (200 billion KRW) narrowed, slowing the growth compared to the previous month. Other loans decreased by 500 billion KRW, centered on credit loans (200 billion KRW), reducing the decline compared to 900 billion KRW in the previous month. Household loans in the secondary financial sector increased by 1.4 trillion KRW, mainly driven by credit card companies (1 trillion KRW), savings banks (600 billion KRW), and insurance (300 billion KRW).

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