South Korean Banks See Fastest Household Loan Growth in Nearly Two Years

SEOUL, June 11 (Yonhap) -- Household loans extended by banks rose at the fastest pace in nearly two years in May as lending linked to stock investment grew amid a market rally, data showed Thursday.

Outstanding household loans by banks grew 6.9 trillion won (US$4.5 billion) to 1,181.8 trillion won last month, accelerating from the previous month's 2.1 trillion-won rise, according to data by the Bank of Korea (BOK).

It marked the sharpest on-month growth since August 2024, when household loans increased 9.2 trillion won from a month earlier.

Mortgage loans increased 3.2 trillion won on-month in May, up from a 2.7 trillion-won gain in April.

Unsecured and other household loans also rose 3.7 trillion won in May following a decline of 600 billion won the previous month, marking the largest increase since April 2021, when such loans gained 11.8 trillion won.

The central bank said rising individual investments in the booming stock market drove the increase in non-mortgage loans.

The benchmark Korea Composite Stock Price Index rallied in May on strong gains in semiconductor shares, surging to the 8,400-point level from 6,500. Individual purchases were the main driver of the stock rally as foreign investors turned net sellers beginning May 7 as part of profit hunting and portfolio rebalancing.

Corporate loans rose 10.6 trillion won from a month earlier in May, following a 10.7 trillion-won gain the previous month.

Outstanding corporate loans stood at 1,408.3 trillion won as of end-May, the latest findings showed.