Household Loans Increase by 3.5 Trillion Won in March, Growth Accelerates Due to Other Loans and Secondary Financial Sector

The increase in household loans in the financial sector widened last month. This is attributed to a turnaround in the growth of other loans and an expansion in loans from the secondary financial sector.

원본보기 아이콘

According to the household loan trends for March announced by the Financial Services Commission and the Financial Supervisory Service on April 8, household loans across all financial sectors increased by 3.5 trillion won last month compared to the previous month. This is a significant rise compared to the previous month's increase of 2.9 trillion won. Household loans, which had decreased by 1.2 trillion won in December last year, started to rise again in January this year, with the scale of the increase expanding each month since then.

By category, mortgage loans increased by 3 trillion won, but the pace of increase slowed compared to the previous month (4.1 trillion won). Mortgage loans from banks increased by only 30 billion won, a sharp decline from the previous month (300 billion won), and mortgage loans from the secondary financial sector also increased by 3 trillion won, but the growth was smaller than the previous month (3.8 trillion won).

In contrast, other loans rose by 500 billion won, turning to an uptrend after a decrease of 1.2 trillion won the previous month. This was due to the reduction in the decline of credit loans, which shrank from a decrease of 1 trillion won in February to a decrease of 200 billion won last month.

By sector, household loans from banks increased by 500 billion won, rebounding from a decrease of 400 billion won the previous month. While the banks' own mortgage loans decreased by 1.5 trillion won, the decline widened, but policy loans increased by 1.5 trillion won, with the rate of increase slightly expanding. Other loans also shifted from a decrease of 700 billion won to an increase of 500 billion won.

Household loans from the secondary financial sector increased by 3 trillion won, but the pace of increase slowed compared to the previous month (3.3 trillion won). Mutual finance institutions saw an increase of 2.7 trillion won, slower than the previous month's 3.1 trillion won. In contrast, insurance companies saw an increase of 600 billion won, with the rate of increase expanding. Savings banks saw a decrease of 400 billion won, with the decline deepening, while specialized credit finance companies showed the same 100 billion won increase as the previous month.

An official from the Financial Services Commission said, "Household loans in March increased slightly compared to the previous month due to the influence of other loans and the secondary financial sector, even though the increase in banks' own mortgage loans was smaller." The official explained, "This was due to the sequential execution of group loans that were approved before the suspension of new loans at mutual finance institutions such as Nonghyup and Saemaul Geumgo." The official added, "The volatility of household loans may increase due to the end of the temporary suspension of higher capital gains tax for multiple home owners on May 9 and continued Middle East risks. All sectors should remain vigilant and closely monitor household loan trends."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.