Household Loans, April 2024May 13, 2024

In April 2024, the outstanding balance of household loans across all financial sectors rose KRW4.1 trillion (preliminary) from the previous month. When compared with the end of 2023, the household loan balance dropped KRW1.8 trillion, which shows that the growth trend remains on a stable course.


* Change (in trillion KRW, m-o-m): +2.6 (Nov 2023), +0.1 (Dec), +0.9 (Jan 2024), -1.9 (Feb), -4.9 (Mar), +4.1 (Apr)p


(By Type)  Home-backed mortgage loans increased KRW4.1 trillion as the banking sector saw a significant growth in mortgage loans (up KRW0.5 trillion → up KRW4.5 trillion). Other types of loans went up KRW0.03 trillion from a month ago (down KRW5.0 trillion) as the banking sector saw an increase of KRW0.6 trillion, while the nonbanking sector saw a slower pace of decline (down KRW2.8 trillion → down KRW0.6 trillion).


(By Sector)  Household loans edged back up in the banking sector while declining at a slower pace in the nonbanking sector. Banks saw a rise of KRW5.1 trillion in household loans compared with the previous month as relevant statistics on household loan data began to incorporate certain types of housing loans previously excluded from household loan statistics but classified instead as policy funds. Banks’ issuance of new mortgage loans also expanded from a month ago (up KRW2.0 trillion → up KRW3.6 trillion). A series of initial public offerings scheduled in April-May also pushed up the volume of credit loans temporarily.


In the nonbanking sector, household loans fell KRW1.0 trillion. Although the pace of the decline slowed compared with the previous month (down KRW3.3 trillion), the overall trend since the second half of 2022 has steadily shown a slowing trend. Mutual finance businesses continued to see a decline (down KRW2.1 trillion) in household loans, while specialized credit finance companies (up KRW0.6 trillion), savings banks (up KRW0.5 trillion), and insurance companies (up KRW0.01 trillion) all saw growth led by increase in credit loans.


(Assessment)  In April 2024, the growth in household loans was caused in part by temporary factors, such as the increase in credit loans in preparation for IPO subscription, but also in part by the addition of the previously excluded types of housing loans to household loan statistics as well as the actual growth of mortgage loans in the banking sector. Therefore, the authorities will continue to closely work with related ministries and maintain strong communication with the financial sector to ensure stable management of the trend of household loan growth. As it remains possible for household loan growth to expand more rapidly in the future, as there are expectations for interest rate cuts and housing market recovery, the financial authorities will remain vigilant and make utmost efforts to ensure the management of household debt growth within the nominal GDP growth rate.

* Please refer to the attached PDF for details.

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