Last month, the household loan balance from the five major banks decreased for the first time in six months. A significant drop in credit loans, which fell by over 1.3 trillion won in a month, along with a sharp reduction in the growth of mortgage loans, has halted the previously ongoing increase in household loans.
According to the financial sector on October 1, the household loan balance from KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup banks stood at 780.834 trillion won at the end of September, a decrease of 1.2852 trillion won from the previous month. This marks the first decline in household loan balances since March.
Household loans from these banks had been increasing for five consecutive months from April to August. Notably, from May onward, the monthly increase ranged from 3 trillion to 4 trillion won, but this trend reversed last month.
The decline in household loans was primarily driven by credit loans. At the end of last month, the balance of personal credit loans was 108.2303 trillion won, down 1.3415 trillion won from the previous month. This follows a decrease of 181.5 billion won in August, marking two consecutive months of decline with an expanding reduction.
Previously, credit loans had surged due to demand for 'investment through debt' amid a booming stock market, with increases of 2.1741 trillion won in May, 2.155 trillion won in June, and 1.0829 trillion won in July. The total increase over these three months exceeded 5.4 trillion won. Recently, however, increased market volatility has dampened demand for investment funds, compounded by rising loan interest rates.
The growth of mortgage loans has also slowed. At the end of last month, the mortgage loan balance was 621.3983 trillion won, an increase of only 125.2 billion won from the previous month, which is about 4% of the increase seen in August of 3.3319 trillion won.
Despite the government's easing of this year's household loan management targets, banks continue to maintain high lending thresholds, and the rise in market interest rates has been reflected in mortgage loan rates, constraining the growth of loans.
In contrast, corporate loans have increased, particularly among large enterprises. At the end of last month, the balance of loans to large corporations from the five major banks was 201.4634 trillion won, an increase of 5.4888 trillion won from the previous month, marking the largest increase since April 2024. The balance of loans to small and medium-sized enterprises also rose by 2.0831 trillion won to 690.0731 trillion won.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.