Regardless of tighter lending rules, family loans prolonged by Korean banks grew at a sooner clip in October on elevated loans for funding amid a robust inventory market, central financial institution information confirmed Thursday.
Banks’ excellent family loans stood at 1,173.7 trillion received ($798.9 billion) as of end-October, up 3.5 trillion received from a month earlier, in line with the information from the Financial institution of Korea (BOK).
It marks an acceleration from a 1.9 trillion-won acquire seen the earlier month.
Dwelling-backed loans elevated 2.1 trillion received from a month earlier to 934.8 trillion received as of end-October, slowing from a 3.9 trillion-won rise the earlier month, whereas unsecured and different kinds of family loans went up by 1.4 trillion received to 238 trillion received.
“The slower mortgage progress got here as demand for jeonse loans declined and the housing transactions slowed down in July and August amid rules,” a BOK official stated.
“However credit score and different loans elevated due primarily to rising funding in home and abroad shares, a surge in preemptive residence purchases forward of the Oct. 15 measures on the housing market and elevated funding demand through the prolonged Chuseok vacation,” he added.
Separate information from the Monetary Supervisory Service (FSS) confirmed family loans prolonged by all monetary establishments rose 4.8 trillion received in October from a month earlier, accelerating sharply from the earlier month’s 1.1 trillion-won acquire.
Dwelling-backed loans prolonged by all monetary establishments, together with financial savings banks and insurance coverage companies, grew 3.2 trillion received final month, slowing from a 3.5 trillion-won improve in September.
However different kinds of loans prolonged to households jumped 1.6 trillion received final month, in contrast with the earlier month’s 2.4 trillion-won decline, the information confirmed.
There was a rising pattern of traders taking out loans to put money into shares amid a market rally. The benchmark Korea Composite Inventory Worth Index (KOSPI) has surged about 70 % to date this yr, pushed by government-led market reform measures and optimism surrounding the substitute intelligence (AI) growth.
Throughout a gathering with reporters Wednesday, Monetary Providers Fee (FSC) Chairman Lee Eok-won emphasised the significance of threat administration whereas noting that the current improve in credit score loans doesn’t seem to pose a menace to monetary stability.
Policymakers are carefully monitoring the property market and family debt developments, as condominium transactions in Seoul rebounded to round 86,000 in September from about 41,000 in each July and August.
In a bid to chill an overheated housing market and curb hovering family debt, the federal government unveiled a brand new set of measures final month, which added 21 extra districts in Seoul to the listing of speculative zones, bringing all 25 districts within the capital underneath more durable rules.
The federal government additionally tightened lending guidelines, decreasing the mortgage mortgage cap to as little as 200 million received.
“Following the newest regulatory strikes, the tempo of residence value will increase has slowed in key areas of the Seoul metropolitan area, however a ballooning impact is seen in some non-regulated areas,” BOK official Park Min-cheol instructed a press briefing.
“In November, mortgage mortgage progress may decide up. As for credit score loans, it’s troublesome to anticipate demand for funding funds, and uncertainties stay excessive,” he added.
The central financial institution information additionally confirmed that company loans went up by 5.9 trillion received from a month earlier in October, additionally choosing up the tempo from a 5.3 trillion-won improve a month earlier.
Excellent company loans stood at 1,366 trillion received as of end-October.
