Last month, household loans in the banking sector increased by 1.9 trillion won, with the growth rate slowing for the third consecutive month. The increase in mortgage loans was limited to 1.5 trillion won, marking a three-month deceleration. The slowdown in housing transactions in the Seoul metropolitan area and the strengthening of household loan management by banks appear to be the reasons.
According to the 'Financial Market Trends' report released by the Bank of Korea on the 11th, household loans in the banking sector last month totaled 1,141.4 trillion won, increasing by 1.9 trillion won from the previous month. Household loans have been on the rise for six consecutive months since April.
The upward trend continued, but the growth rate has decreased for three consecutive months. The monthly increases were 5 trillion won in April, 6 trillion won in May, 5.9 trillion won in June, 5.5 trillion won in July, 9.2 trillion won in August, 5.6 trillion won in September, 3.8 trillion won in October, and 1.9 trillion won in November.
Mortgage loans showed a similar trend. Last month, mortgage loans totaled 901.8 trillion won, increasing by 1.5 trillion won from the previous month. Since a 2.3 trillion won increase in March last year, they have maintained an upward trend for 21 months. However, the growth rate of mortgage loans has decreased for three consecutive months since a 6.1 trillion won increase in September.
The Bank of Korea explained, 'The increase in mortgage loans has been significantly reduced due to a slowdown in housing transactions in the Seoul metropolitan area and continued household loan management by banks.' It seems the introduction of the second stage of stress DSR (debt service ratio) in September and the banks' efforts to strengthen household loan management contributed to the decrease in housing transaction volumes.
According to the Ministry of Land, Infrastructure and Transport, the number of apartment sales transactions in Seoul in October was 4,000, a 58% decrease from the high of 9,518 in July this year. It was the lowest transaction volume in six months since 4,840 transactions in April. Housing transaction volumes in the Seoul metropolitan area also decreased by 3.2% from the previous month, totaling 25,011 transactions in October.
Other loans, including credit loans, totaled 238.5 trillion won, increasing by 400 billion won from the previous month. Following a slight increase of 300 billion won in October, there was a modest rise in November as well. Other loans had decreased by 500 billion won in September but have shown an upward trend for two consecutive months.
Corporate loans saw a significant reduction in growth, from 8.1 trillion won in October to 2.2 trillion won in November. Loans to small and medium enterprises (SME) decreased from 5.3 trillion won to 2 trillion won due to reduced lending activities by major banks, while loans to large corporations saw only a slight increase from 2.9 trillion won to 200 billion won due to reduced demand for funds amid external uncertainties.
Last month, bank deposits increased by 18.9 trillion won to 2,418.1 trillion won, while deposits at asset management firms rose by 8.7 trillion won to 1,065.3 trillion won. Bank deposits grew mainly in time deposits, while asset management firm deposits increased primarily in money market funds (MMF), bond-type funds, and other funds.