This was pushed by a sustained rise in mortgage loans.
South Korean banks’ household loans reached $896b (KRW988.8t) in 2020 spurred by demand for home-backed lending and overdrafts for stock and property investments, reports Yonhap, marking the largest on-year jump since 2004.
On a MoM basis, household loans grew $5.98b (KRW6.6t) in December, slowing from a $12.4b (KRW13.7t) rise in November.
The sharp yearly gain in household loans was mainly driven by a sustained rise in mortgage loans and loans taken out to cover property-related costs and stock investment, according to the Bank of Korea.
Banks' mortgage loans grew $61.8b (KRW68.3t) YoY to $653.5b (KRW721.9t) as of end-December. Non-mortgage loans amounted to $240.8b (KRW266t) in the same period.
Unsecured loans accounted for the bulk of banks' non-mortgage lending.
The financial regulator tightened rules on unsecured loans late last year, as excessive demand for credit loans is feared to hurt households' debt-servicing capacity and banks' financial soundness.
Do you know more about this story? Contact us anonymously through this link.