Household unsecured loans in January were repaid less than usual... 22.4 trillion won in idle funds also left banks

The long-standing "January rule," where office workers receive their year-start performance bonuses and use them to repay loans, has ultimately been broken by the stock market boom.

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Over the past month, the balance of unsecured household loans at major commercial banks decreased by 223 billion won, marking the smallest decline in the past five years. In contrast, investor deposits, which are idle funds set aside for stock investment, increased by nearly 16 trillion won over the same period, and margin financing borrowed from securities firms for stock trading also grew by close to 3 trillion won.

With the domestic stock market remaining buoyant, analysts say even bonus money is now flowing into the stock market.

According to the financial sector on the 3rd, the balance of household unsecured loans at the five major domestic banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) stood at 104.7455 trillion won as of the end of January, down 223 billion won (0.21%) from a month earlier.

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Typically in January, many office workers receive performance bonuses and start by repaying their unsecured loans, so unsecured lending tends to decline sharply. This year, however, the decrease was limited to around 200 billion won. Looking at the time series back to 2022, this is the smallest January decline in the past five years. The January reductions were 2.5151 trillion won in 2022, 3.3506 trillion won in 2023, 1.0240 trillion won in 2024, and 1.5950 trillion won in 2025, which contrasts sharply with past years when the decline was in the trillion-won range. A commercial bank official said, "Looking more closely, new loans did not increase much. The main factor was that households repaid less of their loans than in previous years."

The funds did not flow into demand deposits, which are banks' idle funds, either. Demand deposits have instead shown a clear outflow. As of the end of January, the balance of demand deposits at the five major banks was 651.5379 trillion won, down 22.4705 trillion won (3.45%) in just one month.

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January usually sees a decline in demand deposits, mainly from corporations, due to value-added tax payments and performance bonus payouts, but in the same period last year they fell by only about 3.83 trillion won, making this year's drop much steeper. In other words, the traditional pattern of January bonus money flowing into banks is changing.

Funds leaving banks move into the stock market... 15.8 trillion won increase in idle funds at securities firms

The financial sector believes these funds have moved into the stock market. In fact, as the KOSPI has remained strong this year, surpassing the 5,000 level, the trend has strengthened of money bypassing banks and flowing directly into the capital market.

On January 29, when the KOSPI surpassed the 5,200 intraday level for the first time in history, dealers were working in the dealing room at Woori Bank's headquarters in Jung-gu, Seoul.

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Investor deposits at securities firms, which are idle funds earmarked for stock investment, reached 103.7072 trillion won as of January 29, up 15.8781 trillion won (15.31%) in a month. Effectively, investor deposits at securities firms have filled the gap left by the smaller decline in banks' unsecured loans and the reduction in demand deposits.

What is notable is that while the balance of unsecured loans at banks hardly decreased, margin financing, whereby investors borrow from securities firms using stocks and other assets as collateral, actually increased.

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The balance of margin financing at securities firms stood at 30.2779 trillion won as of the end of January, up 2.9914 trillion won (9.8%) in a month. This suggests a growing investment pattern in which borrowers do not repay their bank loans but instead keep them in place and additionally draw on loans from securities firms.

A financial industry official said, "With the domestic stock market booming, individuals' appetite for stock investment has strengthened, and the time that liquid funds stay in banks has shrunk sharply," adding, "At the beginning of the year, liquidity increases particularly due to performance bonuses and similar payments, making this trend even more evident."