"Bonuses Flow Into Stocks Instead of Debt Repayment... Asset Management Inflows Surge by 140.5 Trillion Won in January–February"

Asset Management Firm Deposits Jump by 48.6 Trillion Won in February, Led by Equity Funds
Synergy from Sharp Rise in Existing Fund Valuations and Strong New Inflows
Nearly 3 Trillion Won in Household Time Deposits Flowed Out in February, Despite

As the stock market continues to surge, a “money move” into equities has driven assets under management at asset management companies to increase by nearly 50 trillion won last month. In just January and February, assets under management soared by 140.5 trillion won. Typically, at the beginning of the year when households receive holiday and performance bonuses, they tend to pay off credit loans or lock funds into bank deposits. This usually results in a significant decrease in other loans and an increase in time deposits. However, last month, a sizable portion of funds flowed into the stock market, which led to a narrower decline in other loans and, in fact, a reversal to a decrease in household time deposits.

In February, household loans from banks decreased by 300 billion won, marking the third consecutive month of decline. While mortgage loans rebounded due to increased housing transactions at the end of the year and demand for moves during the new school term, a continued decrease in other loans was driven by the inflow of bonuses and similar factors. Across the entire financial sector, household loans continued to rise, resulting in a balloon effect in the non-bank sector. Although the overall growth rate of household loans is slowing, experts say it is premature to conclude that the trend has stabilized.

On the 27th of last month, the exchange rate, KOSPI, and KOSDAQ indices were displayed on the index status board in the dealing room of Hana Bank in Jung-gu, Seoul.

Sharp Increase in Existing Valuation, Equity Funds Up by 34.1 Trillion Won... "About 11 Trillion Won Is Newly Injected Capital"

According to the “Financial Market Trends in February 2026” released by the Bank of Korea on March 11, the balance of bank deposits at the end of last month stood at 2,531.2 trillion won, a significant increase of 47.3 trillion won compared to the end of the previous month. This was mainly due to a sharp rise in demand deposits.

Demand deposits surged by 39.6 trillion won, driven by the inflow of corporate settlement funds and local government fiscal execution waiting funds. Time deposits increased by 10.7 trillion won as well, with surplus corporate funds and temporary local government funds being deposited. While household funds in time deposits usually show seasonal growth at the beginning of the year due to the inflow of bonuses, last month saw a net outflow of nearly 2.8 trillion won. This was due to a flow of funds into the domestic stock market, such as the KOSPI, which jumped by about 1,000 points in February alone.

Assets under management at asset management companies continued their record growth from January (up 91.9 trillion won) with another sharp increase in February. Equity funds alone grew by 48.6 trillion won, following a 37 trillion won increase in January, with a significant rise of 34.1 trillion won in February. This figure includes not only new inflows but also changes in the valuation of existing balances. Park Mincheol, head of the market management team at the Bank of Korea’s Financial Markets Department, explained, “The continued surge in assets under management was largely due to the strong rally in the stock market last month, with stock prices rising by more than 10%, which significantly boosted the valuation of existing equity fund balances. Of the total increase in equity funds in February, newly injected capital accounted for approximately one-third, or around the upper end of 11 trillion won.”

Other funds also saw substantial growth of around 7.6 trillion won, following a 16.2 trillion won increase in the previous month. On the other hand, bond funds reversed to a decrease of 200 billion won. Money market funds (MMFs) increased by 5.5 trillion won, but the pace of inflows slowed compared to the previous month (33 trillion won), particularly among corporates, due to a reduced yield advantage.

View of downtown apartments seen from Namsan, Seoul. Photo by Yonhap News

Bank Household Loans Down for Three Consecutive Months, Non-Bank Sector Shows 'Balloon Effect'... "Mixed Risks on Both Sides at Present"

At the end of last month, the balance of household loans at banks was 1,172.3 trillion won, a decrease of 300 billion won from the previous month. Although the decline was smaller than the previous month (down 1 trillion won), household loans have now decreased for three consecutive months. In contrast, household loans across all financial sectors, including non-banks, increased by 2.9 trillion won in February, with the pace of growth accelerating.

At the end of last month, the balance of mortgage loans stood at 934.9 trillion won, an increase of 400 billion won. This turnaround was due to increased housing transactions at the end of the year and demand for moves during the new school term. In Seoul, apartment transactions, which had dropped to 3,400 units in November last year, rose to 4,800 units in December and 5,300 units in January this year. Jeonse loans, which are included in mortgage loans, decreased by 200 billion won.

Other loans decreased by 700 billion won. Other loans typically show a seasonal decrease in January and February as salary workers use their bonuses at the beginning of the year to repay credit loans. This year, the reduction in other loans in January and February reached 1.1 trillion won. However, the decrease was smaller than in previous years (down 4.3 trillion won in January–February 2024 and 2.3 trillion won in 2025). This was due to funds flowing into domestic and overseas stock investments.

Park stated, "Although household loan growth across the financial sector has expanded to nearly 3 trillion won, the overall slowdown in household loans appears to be continuing." He added, "While expectations for housing prices, which had been moving in one direction, have shifted and the upward sentiment has weakened, last year’s experience shows that a slowdown can sometimes turn into renewed growth, so it remains to be seen whether this will lead to trend stability." He further noted, "Currently, both upside and downside risks for the future direction of household loans are present, which means uncertainty remains high."

Corporate loans increased by 9.6 trillion won, a significant expansion compared to the previous month’s 5.7 trillion won increase. Loans to both large corporations and small and medium-sized enterprises (SMEs) grew. Loans to large corporations rose by 5.2 trillion won, reflecting banks’ loan expansion strategies and increased demand for operating funds related to the holidays. Loans to SMEs also increased by 4.3 trillion won. The increase was driven by banks’ business expansion, strengthened inclusive finance, and higher demand for holiday funds.

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