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Banks' household loan growth decelerates in May

June 10, 2021 - 13:12 By Yonhap
South Korean banks' household loans decelerated in May, mainly due to a sharp decline in non-mortgage loans, central bank data showed Thursday.

The aggregate outstanding bank loans to local households came to 1,024.1 trillion won ($917.2 billion) as of end-May, down 1.6 trillion won from the previous month, according to the data from the Bank of Korea (BOK).

The BOK said the slight decline in bank lending was mainly attributable to repayments of loans by customers after the initial public offering of battery maker SK IE Technology Co. A large number of bank customers took out loans to apply for SK IE Technology's IPO subscription.

Banks' mortgage loans grew 4 trillion won on-month to 747.2 trillion won in May.

South Korea has unveiled a set of measures to cool the overheated housing market but has failed to stabilize home prices.

Non-mortgage loans fell 5.5 trillion won last month, sharply accelerating from an 11.8 trillion won increase in April.

Unsecured loans accounted for the bulk of banks' non-mortgage lending. South Korean households rushed in recent months to borrow money to meet demand for property-related costs and subscribe to initial public offering shares.

The financial regulator is seeking to tighten regulations on unsecured loans as excessive demand for credit loans is feared to hurt households' debt-serving capacity and banks' financial soundness. (Yonhap)