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Korea's household loans increase at fastest pace in 4 yrs in February

Published: 02 Mar. 2025, 14:44

Signs about a bank's loan programs are put up on the exterior of a lender in Seoul on Oct. 3, 2021. [YONHAP]

Korea's household credit increased at the fastest pace in four years in February amid a rising property market in the affluent districts of southern Seoul, financial data showed Sunday.

Outstanding household credit extended by all financial institutions, including commercial banks, savings banks, and insurance and securities firms, rose by around 5 trillion won ($3.42 billion) from a month earlier in February.

It is the largest on-month increase in any February since 2021, when household loans expanded 9.7 trillion won from the previous month.

Loans from Korea's five major commercial banks, including KB Kookmin Bank, Shinhan Bank and Hana Bank, jumped by more than 3 trillion won last month.

Meanwhile, those from thrift institutions, like savings banks and internet banks, and credit unions rose by over 1 trillion won.

Experts attribute the sharp increase mainly to seasonal factors but caution that household credit could rise further in the coming months due to surging real estate prices. The market has been stirred by the lifting of the land transaction permit zone regulation in the Gangnam areas in southern Seoul.

The regulation, which required permission for transactions of properties that exceeded a certain size in some areas of affluent districts in southern Seoul, including Gangnam and Songpa, was lifted Feb. 13.

According to separate industry data, housing prices in the four key districts rose 0.36 percent in the second week of February, marking the highest weekly growth since the fourth week of August last year.

Yonhap