With the KOSPI index breaking through 6,000 about a month after it topped 5,000, the balances of major commercial banks' overdraft accounts have exceeded 4 trillion won. Analysts said more people are trying to jump on the "stock market frenzy," even by borrowing.
According to the financial sector on the 27th, as of the 24th of this month, the overdraft balances at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) stood at 4.08277 trillion won. This is the highest level this year and is up 931.1 billion won from the end of December last year.
The five major banks' overdraft balances surged to about 5.3 trillion won around April 2021 amid a low-rate "all-in" investing and "debt investing" boom, then fell to the 3 trillion-won range due to rate hikes and household loans regulations. A bank official said, "Overdraft balances stayed in the 3 trillion-won range for years, but the increase has continued since the end of last year. The impact of the KOSPI frenzy appears to be significant."
Household debt is also on the rise along with the KOSPI. According to the Bank of Korea (BOK)'s released "fourth-quarter 2025 household credit (preliminary)," household credit balances stood at 1,978.8 trillion won as of the end of December last year, a record high. The BOK noted, "As the stock market performed well, other loans turned to an increase, which had a large impact."
With lending rates trending higher, people who borrowed to invest are expected to face heavier interest burdens. As of the 12th, credit lending rates at the five major banks (grade 1, one-year maturity) were 4.010% to 5.380%. Until early this year, there were products with rates in the high-3% range, but they have now disappeared. The one-year bank bond (AAA, unsecured) rate, a benchmark for lending rates, has also been moving between 2.9% and 3.0% since February, remaining elevated.