In the four trading days since the Iran situation, the balances of personal overdraft accounts (credit line loans) at the five major banks increased by about 1.3 trillion won. As volatility grew, with the domestic stock market surging and plunging more than 10%, the fever for "investing with borrowed money" appears to have intensified.
According to the financial sector on Mar. 8, the balance of personal overdraft accounts at the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup—stood at 40.7227 trillion won as of the 5th. That is a sharp increase of 1.2979 trillion won in four trading days from the end of February (39.4249 trillion won).
Personal credit loans from the banking sector are believed to have flowed mainly into the domestic stock market. After the Iran situation, the KOSPI plunged about 18% over two days on the 3rd and 4th. Then on the 5th, bargain hunting came in and the KOSPI jumped 9.63%. As stock prices fell, individual investors appear to have taken out credit loans to invest in stocks.
Time deposits at commercial banks also fell sharply. As of the 5th, time deposits at the five major banks totaled 944.1025 trillion won, down 2.7872 trillion won from the end of last month. During the same period, demand deposits, idle funds that have not found an investment destination, also decreased by 8.5993 trillion won. It is analyzed that most of these withdrawn deposits also flowed into the stock market.
An official at a commercial bank said, "For years, overdraft balances stayed in the 30 trillion won range, but they have been rising since the end of last year," and noted, "The influence of the KOSPI frenzy appears to be significant."