2023-08-26 21:05:00
Authorities urgent on-site inspection… From Hana Bank, the adequacy of loan regulation and review was checked every four days.
Suspension of 50-year maturity and age limit one following another… “Possibility of changing the DSR calculation method”
(Seoul = Yonhap News) Correspondents Park Dae-han, Min Seon-hee, and Oh Ji-eun = Despite the concerns of the government and the Bank of Korea, only the five major banks increased over 2 trillion won in ultra-long term mortgage loans with maturities of 50 years this month.
As demand for new loans focused on the recently launched 50-year maturity products, the balance of all mortgage loans also increased by another 500 billion won, even though loan repayments were mainly made on other maturity products. It is estimated that the increase in household loans across the entire financial sector has continued for the fifth consecutive month.
Accordingly, the authorities first began to check the status of emergency household loans once morest the five major banks. By the end of next month, we plan to intensively examine the adequacy of direct loan regulations and reviews on site.
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In this atmosphere of ‘restraint/restraint in household loans’, banks have begun to set age limits on 50-year maturity products or not to sell them at all, and the possibility of changing the standard for calculating the total debt repayment ratio (DSR) for ultra-long-term loans is even being discussed.
Another 0.5 trillion won increase in the 5 major banks this month… Initiate emergency on-site inspection by authorities
(Seoul = Yonhap News) Reporter Shin Hyun-woo. 2023.7.13 nowwego@yna.co.kr
◇ August household loan 240 billion ↑… 5th consecutive month increase
According to the financial sector on the 27th, the balance of household loans of the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) was tallied at 679.4612 trillion won as of the 24th.
Compared to the end of July (679,220.8 billion won), it increased by another 240.3 billion won this month.
In particular, in the case of mortgage loans, which are leading the recent increase in household loans, they jumped by 484 billion won (512.8875 trillion won → 513.3716 trillion won) during the same period.
Postponing this trend, the increase in household loans in the entire banking and financial sector is likely to continue for five consecutive months from April to August. Last month, household loans in the banking and financial sectors increased by 6 trillion won and 5.4 trillion won, respectively.
Trends in Household Loans and Mortgage Loans by the 5 Major Banks (Unit: KRW 100 million)
※ KB Kookmin·Shinhan·Hana·Woori·NH Nonghyup data collection End of April End of May End of June End of July End of July August 24 Household loans 6,774,691 6,776,122 6,782,454 6,792,208 6,794,612 Compared to the end of the previous month -32,971 1,431 6,332 9,7 55 2,403 Mortgage loans 5,089,827 5,096,762 5,114,007 5,128,875 5,133,716 End of previous month Contrast -22,493 6,935 17,245 14,868 4,840
◇ More 50-year loans due to news of ‘age restriction’
The recent increase in household loans was mainly driven by 50-year mortgage loans.
As of the 24th, the balance of 50-year mortgage loans of the five major banks stood at 2.8867 trillion won, up by 2.21 trillion won this month compared to the end of July (865.7 billion won).
It increased by nearly 1.1 trillion won (1.872 trillion won) only following the 13th, when ultra-long-term products with 50-year maturities were pointed out as the main culprit for the re-increase in household loans, and the possibility of ‘age restriction’ was discussed. It is interpreted that the anxiety psychology of ‘let’s get a loan before it gets clogged’ has influenced.
The 50-year mortgage loan is a loan product that can repay the principal and interest over 50 years. After Suhyup Bank introduced it in January, the five major banks also launched it one following another since last month.
The longer the maturity, the more the total amount of principal and interest to be repaid by the borrower, but since the Total Debt Principal and Interest Service Ratio (DSR) looks at the ability to afford principal and interest once morest income on a yearly basis, the current borrower has the advantage of being able to increase the total loan limit. . This is why the authorities point to 50-year mortgage loans as a ‘DSR circumvention tool’.
Trends in 50-year mortgage loans from the top 5 banks (unit: KRW 100 million)
※ KB Kookmin·Shinhan·Hana·Woori·NH Nonghyup data collection End of July August 12 August 24 End of July
50 year maturity
The balance of the principal debt 8,657 17,995
(+9,338 compared to the end of July) 28,867
(+10,872 compared to 12 days) +20,210
◇ Intensive inspection of “Did you properly check your collateral and income?” Bank “unusual”
As household loan growth did not slow down, the supervisory authorities eventually launched a ‘comprehensive inspection of the handling of household loans’ once morest banks.
According to an official letter sent by the Financial Supervisory Service to the five major banks, the FSS dispatches three auditors (two from the Banking Supervisory Service and one from the Banking Inspection Bureau) to each bank to conduct ▲ loan regulation compliance ▲ credit review including collateral value evaluation and income review. Adequacy ▲ Sales strategy and management system for household loans ▲ Qualitative structural improvement management status such as fixed interest rates and installment repayment methods ▲ IT (information technology) systems related to household loans will be intensively examined.
In effect, it means that the whole household loan process (procedure) of commercial banks is examined from beginning to end.
The official inspection will start with Hana Bank (August 24-29), and next month, KB Kookmin Bank (4-7 days), Woori Bank (11-14 days), Shinhan Bank (18-21 days), NH Nonghyup It is held for four days in the order (19th to 22nd).
After that, the industry observes that there is a high possibility that the inspection of internet banks, etc., which have recently greatly increased housing mortgage loans, will continue until around October.
An official from the department related to commercial bank loans said, “It’s been three years since I worked in this department, but there has been no such on-site inspection in at least three years.” said.
Another bank official explained, “As a result of the inspection, some guidelines may come out, but rather than that, the on-site inspection itself has the effect of sending a strong message to banks to refrain from lending to households.”
◇ Concerned regarding whether it is okay to sell banknotes with a maturity of 50 years… Suspension/age restriction
Individual banks are experiencing considerable confusion as discussions on self-regulation of household loans through the Korea Federation of Banks and related guidelines from the authorities have been delayed more than expected.
According to the banking industry, the Bank Association was originally scheduled to discuss topics such as 50-year mortgage loans and DSRs with commercial banks and financial authorities at the Federation of Banks, but the meeting itself was abruptly postponed.
A commercial bank official said, “I directly asked the authorities whether we should stop selling 50-year maturities or set an age limit. We have set an internal policy to sell products with a maturity of 50 years according to the current standard.”
However, some banks have already stopped selling 50-year mortgages or set an age limit on their own.
Since the 24th, Suhyup Bank has been giving out 50-year mortgage loans only to borrowers under the age of 34, and Daegu Bank is known to introduce the same age limit this month. Kakao Bank is also applying the ‘under 34’ regulation to products with a maturity of 50 years from the 25th.
Nonghyup Bank decided to sell products with a maturity of 50 years until the 31st of this month for the reason of ‘exhaustion of the 2 trillion won limit’, and Kyongnam Bank will also stop selling the same product from the 28th.
In addition to the suspension or age limit for 50-year mortgage loans, the industry is discussing the possibility of the authorities changing the DSR calculation method itself for ultra-long-term loan products such as 50-year maturity.
An official from the banking sector said, “Although the actual maturity is maintained at 50 years, there are observations that a method of calculating the loan limit by considering the maturity as 30 or 40 years will be presented in the DSR calculation process so that it cannot be abused as a means of increasing the loan limit.” said.
shk999@yna.co.kr, pdhis959@yna.co.kr, ssun@yna.co.kr, built@yna.co.kr
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