“Household loans in bank sector exceed 60 trillion won for the first time in four years… Increase for two consecutive months”

Financial Market Trends in May 2024,

[Seoul=Newsis] Reporter Choo So-Pil= In the afternoon of the 2nd, apartments in downtown Seoul are visible from Jamsu Bridge in Seocho-gu, Seoul. It was reported that the government is considering abolishing comprehensive real estate tax. 2024.06.02. scchoo@newsis.com,
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, ‘In May, household loan balances in the banking sector hit a record high for two consecutive months, driven by expectations of interest rate cuts later this year, leading to increased housing transactions and an expansion in bank funding for policy loans such as the Housing Fund.’,
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, ‘According to the Bank of Korea’s “Financial Market Trends in May 2024” released on the 12th, the balance of household loans in the banking sector reached 1,109.6 trillion won last month, increasing by 6 trillion won from the previous month, setting a new all-time high.’,
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, ‘Household loans in the banking sector declined until March last year (-710.9 billion won) due to effects such as interest rate hikes, then turned upward from April (+2.3 trillion won). However, in March this year, it decreased by 1.7 trillion won, marking a year-on-year decline, but rebounded in April by 5 trillion won.’,
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, ‘The increase in policy loans for housing and other loans continued for two months. Housing loans, which hit a record high of 870.7 trillion won, increased by 5.7 trillion won in May alone, showing a larger increase compared to the previous month (4.5 trillion won).’,
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, ‘The expansion of housing loans accelerated due to sustained demand for funds from housing transactions and the increased supply of policy loans from the Housing Fund through secondary support measures. Rental security deposits also increased by 700 billion won in May from a stable level in April. Other loans increased slightly by 300 billion won as influences such as Family Month continued.’,
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, ‘According to the Ministry of Land, Infrastructure and Transport, the number of nationwide apartment transactions in March and April recorded 39,000 and 37,000 households, respectively. The number of move-ins was 38,000 and 20,000 in March and April, respectively, but rebounded to 30,000 households in May. The number of lease transactions was counted at 55,000 and 44,000 households in March and April, respectively.’,
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, ‘Won Ji-hwan, Director of the Financial Market Department at the Bank of Korea, stated, “Household loans in May showed a slightly high growth rate in housing-related loans, influenced by the increase in housing transactions and the expanded supply of secondary support policy loans from the Housing Fund.” He explained that policy loans from the Housing Fund in May were mainly supplied through bank support.’,
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, ‘He then stated, “Currently, it is considered that household loans are being managed stably at a level lower than usual,” but also said they would closely examine the impact of changes in the housing market situation and monetary policy expectations on household loans as some expansion in housing transactions has been observed recently.’,
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, ‘Corporate loans in banks increased by 6.9 trillion won last month, totaling 1,291.6 trillion won. The growth trend continued, particularly centered on small and medium-sized enterprises, although the magnitude of increase was significantly reduced due to seasonal factors.’,
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, ‘Large corporate loans (+6.5 trillion won to +1.1 trillion won) experienced a significant slowdown in growth mainly in operating funds due to factors such as the disappearance of seasonal factors (quarter-end temporary repayment recycling, dividend payments).’,
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, ‘Small and medium-sized enterprise loans (+5.4 trillion won to +5.8 trillion won) continued to increase due to some banks’ business strengthening in corporate loans and an expansion in demand for facility funds.’,
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, ‘Corporate bond issuances continued to be net redeemed following the large-scale initial issuances at the beginning of the year and a reduction in issuance due to seasonal factors. Commercial papers and short-term corporate bonds (+3.6 trillion won to +1.4 trillion won) were slightly net issued, mainly with high-quality products.’,
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