Last month, household loans from banks decreased by 400 billion won, marking a turn to a decline for the first time in nine months. The increase in mortgage loans was limited to 800 billion won, resulting in a slowdown for the fourth consecutive month. The slowdown in housing transactions in the metropolitan area and the tightened management of household loans by banks affected this change.

According to the 'Financial Market Trends' report released by the Bank of Korea on the 15th, household loans from banks totaled 1,141 trillion won in December of last year, representing a decrease of 400 billion won compared to the previous month. Household loans had increased for eight consecutive months since April of last year, but turned around to decline last month.

On the afternoon of Jan. 9, snow is falling in Nohyung-dong, Jeju City, showing the coldest weather of this winter. /Courtesy of News1, reporter Oh Hyun-ji

The impact of the slowdown in the increase of mortgage loans has been significant. Last month, mortgage loans increased by 800 billion won to 902.5 trillion won. The increase compared to the previous month (1.5 trillion won) was reduced to half.

Other loans, including credit loans, switched from an increase of 400 billion won in November of last year to a decrease of 1.1 trillion won in December. Other loans had increased consecutively for two months from October to November of last year but turned to decline after three months.

The Bank of Korea noted, "The increase in mortgage loans has been reduced for four consecutive months due to the decrease in housing transaction volume and the continued management of household loans by banks," adding that "other loans turned to decline due to seasonal factors such as year-end bonuses and the disposal of bad debts."

Corporations also saw a reversal in their growth trend. Following an increase of 2.2 trillion won in November of last year, there was a decrease of 11.5 trillion won in December. Small and medium-sized enterprise loans (-7.1 trillion won) were influenced by temporary repayments for year-end financial ratio management, while large corporation loans (-4.3 trillion won) significantly decreased due to reduced demand for facility funds amid domestic and external uncertainties.

Last month, bank deposits increased by 16.5 trillion won to 2,434.5 trillion won, while asset management company deposits decreased by 23.3 trillion won to 1,042 trillion won. Bank deposits increased primarily due to demand deposits, whereas asset management company deposits decreased mainly in money market funds (MMF).