Household Loans Decline for 8 Consecutive Months Amid High Interest Rates... Time Deposits Near 730 Trillion Won

Household Loans Fall Below 700 Trillion
Credit Loans Decrease While Mortgage and Jeonse Loans Increase
Regular Savings and Installment Savings Rise... Demand Deposits Decline

[Asia Economy Reporter Minwoo Lee] As interest rate hikes continue, the outstanding household loans at major domestic commercial banks have decreased for eight consecutive months. Meanwhile, time deposits have increased for six consecutive months, approaching 730 trillion won.

According to the financial sector on the 1st, the outstanding household loans at the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 696.4509 trillion won as of the end of last month. This is a decrease of 985.8 billion won compared to the previous month. The outstanding household loans peaked last December by surpassing 709 trillion won and have been declining continuously since the beginning of this year. The total decrease this year alone amounts to 12.602 trillion won.

Specifically, the balance of household credit loans decreased by 1.2117 trillion won. This has also been declining every month since the beginning of this year. It is interpreted that people are reducing credit loans due to the sluggish stock market and rising loan interest rates, which have increased their financial burden.

On the other hand, real estate-related mortgage loans and jeonse (key money deposit) loans increased by 621.9 billion won and 507.3 billion won respectively compared to the previous month. This is attributed to the government's recent relaxation of the loan-to-value ratio (LTV) to 80% exclusively for first-time homebuyers last month. However, since housing transactions have been decreasing daily, it appears that loans for living expenses have increased rather than loans for actual transactions.

Meanwhile, as the base interest rate rises, deposit interest rates have increased, leading to a steady rise in deposit balances such as time deposits and installment savings. As of the end of last month, the total deposit balance at the five major commercial banks was 1,834.826 trillion won. Contrary to loans, this marks an increase for eight consecutive months. The total has grown by 80.4688 trillion won this year alone.

By category, time deposits and installment savings showed clear increases, while demand deposits, which have relatively lower interest rates, showed a decreasing trend. As of the end of last month, time deposits amounted to 729.8206 trillion won, increasing by more than 17 trillion won compared to the previous month. During the same period, installment savings also increased by about 600 billion won to 38.7228 trillion won.

In contrast, demand deposits, including Money Market Deposit Accounts (MMDA), stood at 659.6808 trillion won, down by 1.30679 trillion won from the previous month.

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