"I Can't Be Left Behind When Others Are Doubling Their Money"... Five Major Banks' Revolving Credit Line Balances Surpass KRW 40 Trillion

The Balance Surged by 715.2 Billion Won
in Just Three Business Days This Month

While the KOSPI continues to hit record highs day after day, the outstanding balance of negative-balance accounts (credit line loans) at major commercial banks has reached its largest level in three years and four months.

Yonhap News Agency

According to the financial sector on May 10, as of May 7, the outstanding balance of personal negative-balance accounts at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) totaled 40.5029 trillion won. This figure represents the actual amount of loans drawn. Within just three business days since the end of April (39.7877 trillion won), the balance increased by 715.2 billion won.

This is the highest end-of-month balance recorded in three years and four months since the end of January 2023 (40.5395 trillion won). Although this comparison is based on only three business days, the increase of 715.2 billion won is also the largest monthly surge since October 2023 (+872.6 billion won) in two years and seven months. Analysts attribute this to so-called 'debt-fueled investment' (investing with borrowed money), as individual investors, fearing missing out (FOMO), are borrowing short-term funds to jump into the stock market amid the extraordinary market rally.

In 2023, household lending, which had contracted due to the shock of high interest rates, began to rebound on expectations of recovery in the real estate and stock markets. Afterward, the balance of negative-balance accounts at the five major banks remained in the high 30 trillion won range. However, due to various regulations such as the June 27 and October 15 real estate policies, which tightened the cap on mortgage loans, as well as robust domestic and international stock markets, the balance returned to 40.0837 trillion won at the end of November last year. It briefly fell back to the 39 trillion won range at the turn of the year due to year-end and New Year bonus payouts, but as the KOSPI continued to break all-time highs, the balance has surged once again.

'Demand deposits,' categorized as 'idle funds,' are also decreasing. As of May 7, the balance of demand deposits at the five major banks stood at 696.0511 trillion won, down by 501.3 billion won from the end of April (696.5524 trillion won). This follows a decrease of 3.3557 trillion won in April alone, marking a decline for the second consecutive month. Bank officials note that these trends indicate a movement of funds from banks to the stock market.

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