The outstanding loan balance of group loans at major mutual financial institutions, including NongHyup, credit unions, and the Korean Federation of Community Credit Cooperatives (KFCC), increased by more than 3 trillion won in just the first half of this year.
According to materials submitted by the Financial Supervisory Service and the Ministry of the Interior and Safety to the office of People Power Party lawmaker Kim Sang-hun, a member of the National Policy Committee, as of the end of last month the outstanding loan balance of group loans at the three entities—NongHyup, credit unions, and the Korean Federation of Community Credit Cooperatives (KFCC)—totaled 38.15 trillion won. That was up 8.6% (3.01 trillion won) in half a year from the end of last year (35.14 trillion won). It surged 28.4% (8.43 trillion won) from the end of June last year (29.72 trillion won).
Group loans were concentrated at NongHyup and credit unions. As of the end of last month, the outstanding loan balance of group loans at the two institutions was 34.3 trillion won, up 8.5% (2.7 trillion won) from the end of last year (31.6 trillion won). It trended upward for four straight months, from 32.4 trillion won in January to 36.7 trillion won in April, then dipped temporarily in May (33.8 trillion won) before returning to growth last month.
At the Korean Federation of Community Credit Cooperatives (KFCC), the total outstanding loan balance of group loans—combining bridge loans and relocation expense loans—stood at 3.85 trillion won as of the end of last month. This year, the outstanding loan balance of group loans increased for six consecutive months, including ▲January (3.56 trillion won) ▲February (3.68 trillion won) ▲March (3.73 trillion won) ▲April (3.75 trillion won) ▲May (3.82 trillion won) ▲June (3.85 trillion won).
These institutions came under the oversight of financial authorities last year due to aggressive lending. The increase in household loans last year was 5.3 trillion won at the Korean Federation of Community Credit Cooperatives (KFCC), 3.6 trillion won at NongHyup, and 1.5 trillion won at credit unions. This year, the Korean Federation of Community Credit Cooperatives (KFCC) and credit unions were effectively barred from net increases in household loans, and NongHyup was allowed to increase only within 1% from the previous year. However, in the first half of this year, the outstanding loan balance of household loans rose by a total of 11.3 trillion won—7.5 trillion won at NongHyup, 2.4 trillion won at the Korean Federation of Community Credit Cooperatives (KFCC), and 1.4 trillion won at credit unions—far overshooting management targets.
Over the same period, the outstanding loan balance of group loans at the five major commercial banks (KB Kookmin, Woori, Hana, Shinhan, NongHyup) stood at 147.6 trillion won as of the end of last month. Commercial banks fell from 149.8 trillion won in January to 146.2 trillion won in April, but returned to growth in May (146.7 trillion won) and June (147.6 trillion won). Financial authorities are said to have begun reviewing the status of household loans across all financial sectors, including the mutual finance sector.