Bank household loans in Korea rose last month at the fastest pace in one year and 10 months. The surge is attributed to simultaneous sharp increases in mortgage loans for home purchases and "bit-tu" — investing in the domestic stock market with borrowed money.
According to the "June Financial Market Trends" report released Wednesday by the Bank of Korea (BOK), outstanding bank household loans stood at 1,189.4 trillion won at the end of last month, up 7.6 trillion won from the previous month. The figure far exceeds May's increase of 6.9 trillion won and marks the largest jump since August 2024, when loans rose 9.2 trillion won.
A sharp rise in mortgage lending drove much of the increase. Outstanding mortgage loans reached 945 trillion won in June, up 4.3 trillion won from the previous month. This is the largest increase in a year, since June last year, when mortgages rose 5.1 trillion won. "While jeonse loans showed a declining trend, the increase widened due to a rise in housing transactions in the Seoul metropolitan area during April and May, as well as demand for interim payments on units that had already been pre-sold," a BOK official said.
According to the Ministry of Land, Infrastructure and Transport (MOLIT), Seoul apartment sales transactions averaged around 5,500 units per month from January to March this year, before climbing to 8,600 units in April and 8,700 units in May.
The growth in other loans, including credit loans used for debt-financed stock investment, also continued. Outstanding other loans stood at 243.5 trillion won last month, up 3.3 trillion won from the previous month. After rising 3.7 trillion won in May, the increase remained in the 3 trillion won range last month. Despite quarter-end sales and write-offs of nonperforming loans, other loans grew significantly, centered on credit loans, as individuals expanded their stock investments, the BOK explained.
Meanwhile, the growth in bank corporate loans shrank considerably. Outstanding bank corporate loans stood at 1,413.4 trillion won last month, up 5.1 trillion won from the previous month — about half of May's increase of 10.6 trillion won. Loans to small and medium-sized enterprises rose by only 1.7 trillion won, falling short of May's 5.4 trillion won increase, due to sales and write-offs of nonperforming loans and reduced lending supply from some specialized banks. Loans to large corporations narrowed from an increase of 5.2 trillion won to 3.4 trillion won over the same period.
