Household loans at 5 major banks grow by 2.6 trillion won in a month amid debt-financed investing

As 'debt-financed investing'—borrowing to invest in stocks or real estate—picks up again, household loan balances at the five major banks (KB, Shinhan, Hana, Woori, and NH NongHyup) grew by 2.6058 trillion won in a single month, standing at 783.4397 trillion won as of the 22nd. The backdrop is continued gains in Seoul apartment prices, which rose 0.13% week-on-week in the third week of October (as of the 19th), marking an 89th consecutive weekly increase. The upward trend in metropolitan-area home prices is cited as the driver behind the loan growth.

By loan type, mortgage loan balances stood at 622.3978 trillion won, up 999.5 billion won from the end of the previous month. Within mortgages, jeonse (long-term rent deposit) loans fell 371.9 billion won to 118.9261 trillion won, while bulk loans to corporations rose 481.2 billion won to 150.2333 trillion won. Unsecured credit loan balances among household loans grew 1.121 trillion won to 109.3513 trillion won, turning to growth for the first time in three months.

Savings grew alongside household loans. Time deposit balances at the five major banks stood at 1,017.3593 trillion won as of the 22nd, up 11.2722 trillion won from the end of the previous month.

According to Financial Supervisory Service data, the delinquency rate on loans at domestic banks—based on principal and interest overdue for more than one month—stood at 0.69%, up 0.06 percentage points from the previous month (0.63%) and 0.08 percentage points from a year earlier (0.61%). This is the highest level in 9 years and 10 months, since October 2016 (0.81%).