In the first quarter of 2026, industrial loans exceeded 2060 trillion won, with significant increases in corporate borrowing, particularly in the manufacturing and service sectors. The rise was influenced by the reissuance of previously repaid credit lines for financial ratio management and the execution of policy financing to support semiconductor investments.
According to the Bank of Korea, the balance of sectoral loans from depository institutions at the end of the first quarter stood at 2061.8 trillion won, an increase of 35.6 trillion won from the previous quarter. This marks the largest increase since the third quarter of 2022, which saw a rise of 56.7 trillion won, ending a 14-quarter trend.
Both the manufacturing and service sectors experienced expanded loan growth. Manufacturing loans increased from 12 trillion won in the previous quarter to 11.1 trillion won, while service sector loans surged from 9.2 trillion won to 24 trillion won.
The manufacturing sector saw growth in working capital loans due to a trend towards productive financing and the reissuance of previously repaid credit lines at the end of last year. Construction loans, which increased by 4 trillion won, marked a turnaround after seven quarters of decline, reflecting the impact of rising construction output.
In the service sector, loans in the finance and insurance industries rose by 9.8 trillion won, while retail and wholesale sectors saw an increase of 4.9 trillion won due to improved market conditions. The real estate sector also experienced a rise of 2.6 trillion won, influenced by the base effect of bad debt write-offs.
Lee Hye-young, head of the Financial Statistics Team at the Bank of Korea, noted, "The retail and wholesale sectors benefited from the reissuance of loans that were temporarily repaid for financial ratio management at the end of the year, along with some companies' demand for corporate bond repayments and improved market conditions. The finance and insurance sectors also reflected increased demand for credit from securities firms and proactive funding needs ahead of rising interest rates."
By purpose, working capital loans significantly increased from 1.9 trillion won in the previous quarter to 26.2 trillion won. This growth was driven by the reissuance of previously repaid credit lines in both the manufacturing and service sectors.
Investment loans also expanded from 6.6 trillion won to 9.4 trillion won. In manufacturing, growth was centered on electronic components, computers, and communication equipment, while in services, the retail and real estate sectors continued to show an upward trend.
By sector, loans from depository banks increased from 9.6 trillion won to 25 trillion won. Non-bank depository institutions also saw a turnaround, shifting from a decrease of 1.1 trillion won to an increase of 10.6 trillion won.
Among depository bank loans, the increase in loans to large corporations surged from 900 billion won to 12.7 trillion won. Loans to small and medium-sized enterprises (excluding individual business owners) rose from 6.9 trillion won to 10.1 trillion won, while loans to individual business owners remained stable, increasing by 1.5 trillion won.
Lee emphasized, "This growth trend is the result of a combination of the financial sector's focus on productive financing and the reissuance of temporarily repaid loans at the end of last year. While the increase is significant, it is not excessive compared to historical levels."
* This article has been translated by AI.
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