Household Loans Increase by 4.3 Trillion Won in February... 'Rise Reverses Due to Holiday Effect and Full Resumption of Lending'

Financial Services Commission's Household Loan Trends in February
Effect of Lunar New Year Holiday in January Reflected
Full Resumption of Loans by Financial Sector in February
March Household Loan Trends Will Be Key

Household loans increased by 4.3 trillion KRW last month. With this year's Lunar New Year holiday occurring in January and the financial sector resuming loan issuance in earnest from February, combined with moving demand for the new school semester, household loans increased overall across banks and secondary financial institutions. The exact trend of household loan growth is expected to be gauged from the March statistics.

The Financial Services Commission announced on the 11th the 'Household Loan Trends in February' containing these details. Household loans in February increased by 4.3 trillion KRW, reversing the previous month's (a 900 billion KRW decrease) downward trend. This marks an increase just one month after household loans in the financial sector had turned to a decline.

The increase in mortgage loans was overwhelmingly large. Mortgage loans surged by 5 trillion KRW compared to the previous month. This is a significant expansion compared to the January increase (+3.2 trillion KRW). Secondary financial institutions saw an increase of 1.5 trillion KRW compared to the previous month, similar to January's increase (+1.5 trillion KRW).

Other loans decreased by 600 billion KRW compared to the previous month. This is a reduction in the decline compared to January's decrease in other loans (-4.1 trillion KRW). This is interpreted as the effect of credit loans increasing by 100 billion KRW, unlike the sharp decrease in January (-1.5 trillion KRW).

Looking at each financial sector, household loans increased in both banks and secondary financial institutions. Bank household loans increased by 3.3 trillion KRW compared to the previous month, switching from a decline (-500 billion KRW) to an increase.

Policy loans increased by 2.9 trillion KRW compared to the previous month, expanding the increase compared to January (+2.2 trillion KRW). Bank-owned mortgage loans increased by 600 billion KRW compared to the previous month, turning to an upward trend. Other loans such as credit loans saw a reduced decline (-2.1 trillion KRW → 200 billion KRW) compared to the previous month.

Household loans in secondary financial institutions increased by 1 trillion KRW compared to the previous month, reversing from a decline (-500 billion KRW) to an increase. Specifically, mutual finance (-100 billion KRW → +800 billion KRW) and credit card companies (-100 billion KRW → +300 billion KRW) turned to an increase. Conversely, savings banks (+200 billion KRW → -20 billion KRW) shifted to a decline, and insurance (-500 billion KRW → -100 billion KRW) saw a reduced decrease compared to the previous month.

The financial authorities stated, "Household loans in February increased somewhat sharply as the financial sector resumed loan issuance in earnest under new management goals at the beginning of the year, combined with moving demand for the new school semester. Considering the expansion of repayments for the Housing and Urban Fund's Didimdol and Beotimok programs and the easing of new semester demand, the trend of mortgage loan execution decreasing in March is within a manageable range."

They added, "However, since there are concerns about localized housing price increases mainly in some areas of Seoul where real estate regulations have been eased, we will consistently maintain the household debt management stance."

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