Last month, the growth of household loans from banks slowed. However, mortgage loans saw an increase due to a rise in housing transactions in the metropolitan area.
According to the Bank of Korea's financial market trends report released on September 9, the balance of household loans from deposit banks, including policy mortgage loans, stood at 1,198.3 trillion won at the end of August, an increase of 3.4 trillion won from the end of the previous month.
The household loan balance surged by 7.6 trillion won in June, marking the largest increase in 22 months since August 2024 (+9.2 trillion won), but the growth rate has slowed for two consecutive months following increases of 5.5 trillion won in July.
Lee Seung-yeop, head of the Bank of Korea's market management team, stated, "While the overall increase in household loans has diminished, mortgage loans continue to show a solid upward trend. We need to monitor the impact of the government's real estate measures in August."
By loan type, the balance of mortgage loans rose by 4 trillion won to 952.5 trillion won, a larger increase than the previous month (3.5 trillion won). This growth occurred amid a continued decline in demand for jeonse (long-term rental deposits), influenced by increased housing transactions and supply in the metropolitan area since May.
The balance of other loans decreased by 6 trillion won to 244.9 trillion won, reversing the previous month's increase of 2 trillion won due to a slowdown in individual stock investments and stricter management of credit loans by banks.
As of the end of August, the balance of corporate loans from banks reached 1,430.8 trillion won, an increase of 9.7 trillion won from the end of July. This marks an expansion in growth compared to July (7.7 trillion won).
The increase in corporate loans was driven by major banks strengthening their lending operations and the funding needs of companies for bond repayments, with large corporations borrowing an additional 4.9 trillion won. Loans to small and medium-sized enterprises increased by 4.8 trillion won, supported by financial assistance from some banks.
After a decrease of 30 trillion won in July, bank deposits turned around to show an increase of 100 billion won in August.
Demand deposits fell by 14 trillion won due to corporate withdrawals for tax payments, despite inflows from local government financial execution funds. Following a record drop of 80.8 trillion won in July, the decline has moderated.
Time deposits increased by 20 trillion won due to inflows from household funds and temporary deposits from local governments.
Asset management companies saw an increase of 23.5 trillion won in deposits, primarily in equity funds.
Equity funds rebounded with an increase of 15.5 trillion won in August, following a decline of 56.2 trillion won in July due to rising stock prices. Conversely, bond funds decreased by 3 trillion won due to rising interest rates.
Money market funds (MMFs) increased, primarily driven by corporate funds, but only rose by 5.6 trillion won due to seasonal effects from the previous month.
* This article has been translated by AI.
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