South Korean household loans decline for first time in six months

SEOUL, Sept. 6 (Yonhap) -- Household loans by major banks fell for the first time in six months in September, as banks continue to strictly manage rapid borrowing, financial data showed Sunday.

Outstanding household loans at five major lenders -- KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH NongHyup Bank -- stood at 781.39 trillion won (US$580.49 billion) as of Thursday, down 727.6 billion won from the end of August, according to the data compiled by the banks.

It marks the first time since March the monthly outstanding figure fell from a month earlier.

Of them, outstanding mortgage loans stood at 620.5 trillion won as of Thursday, a drop compared to 621.2 trillion won recorded as of end-August.

The decline came despite the government relaxing the cap on household loans, as banks maintained their self-imposed loan restrictions, industry officials said.

The five major lenders are said to have received additional quotas from financial authorities, raising their annual target for household loan growth from 4.3 trillion won in 2025 to 7.1 trillion won this year.

"Once loan supply resumes, driven by collective lending, mortgage growth is highly likely to regain momentum in the near future," an official from a local bank said.

Excluding policy loans, outstanding household loans at the five major banks maintained an uptrend, increasing by 108.7 billion won from the end of last month, according to the data.