December Bank Household Loans Increase by 3.1 Trillion Won... Mortgage Loans Up, Other Loans Down

Last month, bank household loans increased by 3.1 trillion won, showing a smaller increase compared to the previous month. This was due to a slight decrease in the growth of mortgage loans and an expanded decrease in other loans.

According to the "December Financial Market Trends" released by the Bank of Korea on the 10th, bank household loans (including policy mortgage loans) increased by 3.1 trillion won last month, down from 5.4 trillion won in the previous month.

Mortgage loans saw their growth shrink from 5.7 trillion won in November to 5.2 trillion won in December, influenced by a decline in housing sales transactions. Jeonse (key money deposit) loans increased by 100 billion won.

Yoon Ok-ja, Deputy Head of the Market General Team at the Bank of Korea’s Financial Market Department, explained the reason why the slowdown in mortgage loans was not clear despite the weakening demand for funds related to housing sales: "The impact of the contraction in housing transactions since October last year is reflected, but there are flows of group loans related to scheduled apartment move-ins, which seem to have limited the reduction in the overall increase of mortgage loans."

On the other hand, other loans saw a larger decrease from 400 billion won in November to 2 trillion won in December, influenced by seasonal factors such as year-end bonus inflows and the sale and write-off of non-performing loans. Deputy Head Yoon forecasted, "The effect of bonus inflows will continue in January, and there will be holiday bonuses in February as well, so loans are not expected to increase significantly."

Last month, bank corporate loans decreased by 5.9 trillion won, marking a decline for the first time in a year. This was mainly due to seasonal factors causing both large and small-to-medium enterprises to shift to a decrease.

Loans to large corporations decreased by 2 trillion won, mainly in working capital, due to repayments of limit loans for year-end financial ratio management.

Loans to small and medium enterprises decreased by 3.9 trillion won due to banks’ sale and write-off of non-performing loans and year-end loan repayments by companies.

Regarding the impact of new policy mortgage loans such as the newborn special loan on household loans, Deputy Head Yoon said, "Although demand is expected to be quite high due to low interest rates, since it is limited to households with newborns, the range of households eligible will be narrower compared to the special Bogeumjari loan."

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