Key facts
- Household loans from five major South Korean banks rose by 3.8 trillion won in July.
- Mortgage loans increased by 2.3 trillion won, reaching 617.4 trillion won.
- Credit loans grew by 1.4 trillion won to 110 trillion won.
- Demand for mortgages was strong due to rising housing prices in Seoul and surrounding areas.
- Investors borrowed more short-term funds for credit loans to capitalize on stock market dips.
Household loans from major South Korean banks saw a significant increase in July, primarily driven by a surge in mortgage and credit lending. Outstanding household loans at five key lenders—KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank—reached 778.8 trillion won (US$538.6 billion) as of Thursday, up 3.8 trillion won from the previous month.
The rise in mortgage loans, which increased by 2.3 trillion won to 617.4 trillion won in July, marked the sharpest month-on-month gain since August of the previous year. Experts attribute this demand to escalating housing prices in Seoul and its surrounding metropolitan areas.
Simultaneously, credit loans grew by 1.4 trillion won to 110 trillion won by the end of June. This figure represents the largest balance since March 2023, when it stood at 111.2 trillion won. The increase in credit loans was largely fueled by overdrafts, as investors borrowed short-term funds to take advantage of stock market opportunities during a sharp decline in the final week of July.