January Corporate Bond Net Issuance Amount 4.5 Trillion Won... Largest Since Statistics Began

Bank of Korea's 'January Financial Market Trends'
Bank Household Loans Increase by 3.4 Trillion Won

The 'Mortgage Refinancing' service through an online, one-stop refinancing loan infrastructure surpassed 10,000 applicants within 15 days of its launch, with the application amount approaching 1.8 trillion won. The photo shows an ATM of a commercial bank installed in Yongsan-gu, Seoul, on the 25th. Photo by Jinhyung Kang aymsdream@

Last month, the net issuance amount of corporate bonds reached the highest level ever recorded for January since statistics began in 2002. This was due to increased investment demand amid expectations of future interest rate cuts and companies executing corporate bond issuances that had been postponed at the end of last year.

According to the "Financial Market Trends in January" released by the Bank of Korea on the 14th, the net issuance amount of corporate bonds last month was 4.5 trillion won, marking the highest level in 22 years for January. Won Jihwan, head of the Market General Team at the Bank of Korea’s Financial Market Department, explained, "With strong investment demand from institutions at the beginning of the year, companies significantly increased issuance for purposes such as refinancing, resulting in a substantial net issuance."

Bank household loans (including policy mortgage loans) increased by 3.4 trillion won, slightly expanding from the previous month’s increase of 3.1 trillion won.

Despite a decline in mortgage loan interest rates, housing mortgage loans increased by 4.9 trillion won, 200 billion won less than the previous month’s 5.1 trillion won, affected by a decrease in housing transactions.

Mr. Won explained, "The decline in loan interest rates is reflected with a time lag, and housing transactions have decreased, resulting in an increase similar in scale to the previous month."

When asked about the impact of the launch of policy mortgage loans on household loans, Mr. Won said, "In January, the effects of policy changes such as the refinancing loan platform and newborn special loans were still minimal."

He added, "Although there are likely more restrictions compared to last year’s special Bogeumjari Loan, if housing sales sentiment rebounds, it could stimulate actual demand, so continuous monitoring is necessary."

Other loans decreased by 1.5 trillion won due to inflows such as year-start bonuses. The decrease narrowed compared to the previous month (-2 trillion won), which had effects from quarter-end non-performing loan sales and write-offs.

Last month, bank corporate loans turned to an increasing trend for both large and small and medium-sized enterprises (SMEs) due to seasonal factors. Seasonal factors include year-end temporary repayments being reissued and value-added tax payment demand on January 25.

Loans to large corporations significantly increased to 5.2 trillion won, unlike the previous month (-2 trillion won), mainly due to working capital loans as interest on loans temporarily repaid at the end of the previous year was reissued.

Loans to SMEs increased by 1.5 trillion won compared to the previous month (-3.9 trillion won), mainly driven by small and medium-sized corporations.

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