Household Loans Decrease by 1.3 Trillion Won in September...Return to Decline After One Month

[Asia Economy Reporter Song Hwajeong] Household loans returned to a declining trend last month.

According to the 'Household Loan Trends in September 2022' announced by the Financial Services Commission on the 13th, household loans across all financial sectors decreased by 1.3 trillion KRW last month. The year-on-year growth rate was 0.6%, continuing the slowdown trend since the second half of last year. Household loans, which showed an increase in August, turned to a decrease within a month.

The overall household loans decreased as the increase in mortgage loans narrowed compared to the previous month and the decrease in other loans expanded. Last month, mortgage loans increased by 2 trillion KRW in September, with the increase narrowing compared to the previous month (2.7 trillion KRW), mainly due to bank group loans. Other loans decreased by 3.3 trillion KRW in September, mainly due to credit loans, significantly expanding the decrease compared to the previous month (1.8 trillion KRW).

By financial sector, household loans in both banks and secondary financial institutions turned to a decrease. Last month, bank household loans decreased by 1.2 trillion KRW. Mortgage loans increased by 900 billion KRW, mainly due to jeonse loans (600 billion KRW) and group loans (500 billion KRW), narrowing the increase compared to last month (1.6 trillion KRW). Other loans decreased by 2.1 trillion KRW, mainly credit loans, expanding the decrease compared to the previous month (1.3 trillion KRW). In the secondary financial sector, loans increased by 600 billion KRW in insurance and 200 billion KRW in savings banks, while decreasing by 500 billion KRW in mutual finance and 500 billion KRW in credit card companies, resulting in a net decrease of 100 billion KRW.

A Financial Services Commission official explained, "Mortgage loans slightly increased during the month due to continued demand for group loans and jeonse-related funds, but the increase narrowed compared to the previous month," adding, "Other loans such as credit loans saw an expanded decrease compared to the previous month due to rising interest rates and a decrease in credit loans caused by the inflow of Chuseok bonuses."

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