Bank household loans increased last month for the first time in four months despite the government's stringent real estate lending regulations. The rise came as margin trading surged amid heightened stock market volatility following tensions in the Middle East, boosting credit loans and other lending.
According to the 'Financial Market Trends' released by the Bank of Korea (BOK) on the 8th, outstanding household loans at deposit banks stood at 1,172.8 trillion won at the end of March, up 500 billion won from the previous month. This marks the first increase since November last year, ending a four-month decline.
By loan type, mortgage loan balances remained unchanged at 934.9 trillion won over the month. After rising 300 billion won in February, mortgages flatlined due to banks' strengthened household loan management and weakening demand for jeonse (lump-sum deposit lease) financing.
In contrast, other loans increased by 500 billion won to 237.1 trillion won, driven by rising credit loans for stock investment.
"Since the outbreak of the Middle East crisis, share prices have shown significant volatility, and individuals appear to be borrowing to invest in stocks," said Park Min-chul, deputy director of the BOK's Market Operations Team. "If credit-financed stock investment continues to grow, it could accelerate declines during market corrections."
Meanwhile, corporate loans at deposit banks reached 1,387 trillion won at the end of March, up 7.8 trillion won from the end of February, marking the third consecutive monthly increase. Both large corporations and SMEs saw loan balances rise as major banks pursued "productive financing" initiatives and demand for working capital grew.
However, the corporate bond market, a key funding channel for companies, continued to see net redemptions. Rising bond yields following the Iran conflict have dampened corporate bond issuance. Net redemptions totaled 300 billion won last month, following 4.1 trillion won in February. The BOK noted that "net redemptions continued as maturing corporate bond volumes expanded, while seasonal factors such as shareholder meetings and heightened interest rate volatility reduced issuance."
