Korean banks’ household loans drops in March as mortgage demand slows

In contrast, bank lending to the corporate sector increased by over KRW10t.

Bank lending to the household sector dropped by $1.17b (KRW1.6t) in March to just KRW1,092t (approximately US$802b), weighed by slower growth in home mortgages and demand for other types of loans declining, according to data from the Bank of Korea (BOK).

Mortgage growth grew by only $364.7m (KRW0.5t) in March, slowing from the $3.57b (KRW4.9t) growth reported in February, amidst lower demand.

Other loans “declined significantly” by $2.04b (KRW2.8t) during the month, according to the BOK. This was due to “sustained redemptions of unsecured loans, and write-offs and sales of NPLs at the quarter-end,” the central bank said.

ALSO READ: BOK joins project exploring use of tokenisation to improve cross-border payments

In contrast, bank lending to the corporate sector jumped by $7.58b (KRW10.4t) in March, thanks to higher demand for funds and bank’s strategies to expand corporate lending.

In total, banks in South Korea hold $927.7b (KRW1,272t) in outstanding corporate loans as of end-March 2024.

(US$1 = KRW1,370.99)

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