Three of the five major commercial banks have already exceeded the total volume of household loans allotted for this year in just half a year. As the financial authorities tightened the loan limit compared with last year, the threshold for funding for genuine demand is expected to rise further in the second half.
According to the banking sector on the 22nd, as of the 15th, the outstanding loan balance of household loans at the five major commercial banks (excluding policy loans) totaled 649 trillion 6612 billion won. Compared with the balance at the end of last year (644 trillion 9761 billion won), it increased by 4 trillion 6851 billion won, about 8% above this year's total volume growth target for the five banks (4 trillion 3363 billion won).
Among them, three have already exceeded their annual targets by 40% to 50%. Because the amount available to lend the following year is set based on that year's lending performance, these banks are expected to strictly manage household loans in the second half. KB Kookmin Bank, which exceeded the loan limit last year, saw its mortgage loan (home-backed loan) target reduced this year.
Even the two banks that have used only about half of their targets are not in a position to relax, given the recent trend in loan demand. This year, the amount banks can lend as authorized by the financial authorities is so small that they reportedly began managing volumes from the first half. The Financial Services Commission said it would keep the household debt growth rate within 1.5%, lower than last year's 1.7%, and rolled out stringent rules that set a separate target for mortgage loans.
Along with total loan volume controls, the banking sector is also encouraging repayment of existing loans. Shinhan Bank is cutting limits by up to 20% when extending the maturity of overdraft accounts, and KB Kookmin Bank will waive prepayment fees on all household unsecured loans through the end of the year.