Household loans from 5 major banks expand for 2nd consecutive month in May

A man walks pass a sign about a bank's loan programs put up on the exterior of a lender in Seoul on May 9, 2024.

Household loans extended by five major lenders in South Korea rose for the second straight month in May on a rise in mortgage and credit loans, industry data showed Sunday.

Household loans extended by the five top lenders added 4.7 trillion won ($3.39 billion) from a month earlier to 702.7 trillion won as of end-May, according to data compiled by Yonhap News Agency.

It marked the second consecutive on-month growth from 4.4 trillion won in April, following a 2.2 trillion-won drop in March.

The gain in May also represented the highest on-month increase since July 2021, when the balance of household loans expanded by 6.2 trillion won.

The sharp monthly rise in outstanding household loans was largely led by a 4.6 trillion-won increase in home-backed loans, compared with a 4.3 trillion-won gain the previous month.

Credit loans also increased by 321 billion won, following a 402.9 billion-won gain in April.

Experts pointed out that rising home transactions in recent months led to the sharp expansion in household loans.

According to separate data by the Korea Real Estate Board, transactions of apartments in South Korea have been on a steady rise, from 26,000 in December to 32,000 in January, 33,000 in February, 40,000 in March and 44,000 in April. (Yonhap)