The increase in household loans from banks has slowed for the third consecutive month, rising by only 600 billion won in September. This decline is attributed to a slowdown in mortgage loans and a significant drop in other loans, such as credit loans. In contrast, corporate loans have seen a continuous increase for three months, driven by rising demand from large companies.
According to the Bank of Korea's 'Financial Market Trends' report released on October 15, the balance of household loans from deposit banks, including policy mortgage loans, stood at 1,198.9 trillion won at the end of September, an increase of 600 billion won from the previous month.
The growth in household loans has decreased from 5.5 trillion won in July to 3.5 trillion won in August, and then to just 600 billion won in September.
By loan type, mortgage loans, including Jeonse (key money deposit) loans, increased by 2.9 trillion won to 955.5 trillion won. However, the growth in mortgage loans has also slowed compared to August, when it rose by 4.1 trillion won. The ongoing decline in Jeonse transactions and a decrease in the number of new housing units have contributed to this slowdown.
Lee Seung-yeop, head of the Bank of Korea's Market Management Team, explained, "Since the real estate measures in August, housing prices in the metropolitan area, particularly in the Gangnam district and Yongsan, have been falling, and transaction volumes have decreased, leading to a gradual slowdown in individual mortgage loan growth."
However, he noted, "In other areas of Seoul and some regions of Gyeonggi Province, housing prices are still on the rise, making it difficult to predict the future impact of housing price trends on household loans, so we plan to monitor the situation closely."
The balance of other loans, including credit loans, decreased by 2.3 trillion won to 242.6 trillion won, marking a significant increase in the decline compared to August, which saw a decrease of 600 billion won.
Last month, the balance of corporate loans from banks rose by 10.7 trillion won to 1,441.5 trillion won, continuing to expand for the third consecutive month.
Of this, loans to large corporations increased by 7.5 trillion won due to heightened demand for funds for corporate bond repayments and facility investments, while loans to small and medium-sized enterprises rose by 3.2 trillion won, driven by ongoing working capital needs, including those related to the Chuseok holiday, despite the impact of non-performing loan sales and write-offs at the end of the quarter.
Last month, the balance of bank deposits stood at 2,621.7 trillion won, a significant increase of 29.1 trillion won compared to August's increase of 1 trillion won. This rise is attributed to seasonal factors, particularly an influx of funds into demand deposits.
Demand deposits increased by 24.7 trillion won due to corporate funds flowing in for financial ratio management at the end of the quarter, while time deposits also rose by 2.1 trillion won as banks continued their efforts to attract funds, despite the maturity of some large corporate deposits.
* This article has been translated by AI.
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