Last month, bank household loans increased by more than 4 trillion won, recording the largest increase in 19 months.
This was attributable to a significant increase in housing mortgage loans as demand for housing continued and the transition from jeonse to monthly rent slowed down.
According to financial market trends released by the Bank of Korea on the 9th, the balance of bank household loans as of the end of last month stood at 1056.4 trillion won, up 4.2 trillion won from a month ago.
It jumped the most in 1 year and 7 months since October 2021 (increase of 5.2 trillion won). This was mainly due to an increase in mortgage loans.
Housing mortgage loans increased by 4.3 trillion won in May, surpassing the increase from the previous month (2.8 trillion won). The increase in mortgage loans was also the largest since October 2021 (4.7 trillion won).
Yoon Ok-ja, deputy head of the market management team at the Bank of Korea Financial Markets Bureau, said, “The scale of the increase in housing mortgage loans has expanded due to the continued demand for housing purchase funds and the slowdown in cheonsei loans due to the slowdown in the transition from jeonse to monthly rent.” Due to the effect of generally taking two or three months, the increase in apartment sales transaction volume in February and March has led to the demand for housing mortgage loans in May.”
Other loans, which had been on a downward trend, showed a flat level (-200 billion won) this time due to seasonal factors.
Deputy General Manager Yoon explained, “As for other loans, demand for funds related to travel and household month consumption increased during May.”
Bank corporate loans also continued to increase in May. Bank corporate loans increased by 7.8 trillion won, the third largest increase in the same month since the previous breaking figures were written (June 2009).
In particular, loans to large corporations (an increase of 3.4 trillion won) surged considerably due to demand for corporate operating funds and demand for funds for repayment of corporate bonds. Small and medium-sized business loans (increased by 4.4 trillion won) continued to increase steadily due to banks’ easing lending attitude.
In May, while the issuance of corporate bonds decreased, the amount of maturity increased, resulting in a net redemption of 2.9 trillion won, expanding from the previous month (-900 billion won). It was analyzed that the increase in net redemption of corporate bonds was due to seasonal factors such as the submission of regular reports in the first quarter, when corporate bond issuance was reduced.
Deputy General Manager Yoon said, “It was also due to the maturity of large-scale corporate bonds issued right after Corona 19,” and “a significant amount of them is believed to have been repaid by funds raised from corporate bonds issued before May.”
Bank deposits turned to an increase of 8.2 trillion won. This is the first increase since the second half of last year when the deposit interest rate rose sharply. Of these, occasional deposits decreased (-8.8 trillion won) from the previous month as household and corporate funds outflowed despite the inflow of local government funds.
Time deposits increased significantly (10.5 trillion won) thanks to the inflow of household and local government funds and the efforts of some banks to attract corporate funds. On the other hand, deposits from asset management companies decreased slightly (-1.2 trillion won). This was mainly due to a large outflow of funds from money market funds (MMF) (-7.6 trillion won).
Reporter Kim Kyung-ho [email protected]
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