It was found that household loans declined for the third month in a row due to the influence of bank loan management and external uncertainties.
If you look at the ‘Financial Market Trends in February’ released by the Bank of Korea today (10th), household loans in the banking sector decreased by 100 billion won last month compared to a month ago.
It is the first time since the breaking statistics were recorded that household loans in the banking sector recorded a decline for three consecutive months.
In particular, other loans including credit loans decreased by KRW 1.9 trillion. It is analyzed that the government’s strengthening of loan regulations, rising interest rates on loans, and slowing demand for investment funds such as stocks had an impact.
Hwang Young-woong, Deputy Head of Market Team, said, “The decrease in other loans is the result of increased risk aversion in investment amid growing external uncertainty and continued management of bank credit loans. We are making a move to strengthen our sales, so we have to keep an eye on the future trend.”
Mortgage loans increased by 1.8 trillion won in one month. Although demand for funds related to jeonse and group loans continued, the increase was reduced by 400 billion won compared to the previous month due to slowing housing transactions.
Corporate loan growth slowed from the previous month as the seasonal factors at the end of the year disappeared, but it maintained an increase that exceeded the previous year’s level.
Last month, corporate loans from banks increased by 6.3 trillion won from the previous month. From 2017 to February 2020, the average increase was KRW 4.2 trillion.
Loans to large corporations increased by KRW 700 billion, but the increase was reduced by more than KRW 3 trillion compared to the previous month due to a decrease in demand for working capital.
Loans to SMEs increased by KRW 5.6 trillion due to the continued demand for facility funds and COVID-19 related funds.
Meanwhile, household loans from the second financial sector also continued to decline for the second month in a row.
According to the ‘Household Loan Trends in February (provisional)’ announced by the Financial Services Commission, household loans from the second financial sector decreased by 100 billion won from the previous month.
Although the decrease was 100 billion won less than the previous month, the decline continued mainly with mutual finance (-600 billion won).
As a result, household loans in all financial sectors decreased by KRW 200 billion from the previous month.
The Financial Services Commission said, “We will continue to push for a soft landing so that the increase in household debt, which has greatly expanded in the process of overcoming COVID-19, remains at a stable level.”
