Mortgage loans drive up South Korean banks’ household loans in June

They also set a fresh record for half-year increase in household loan value.

South Korean bank’s household loans totalled $896b (KRW1,030t) as of end-June, KRW6.3t higher than a month earlier, thanks to a surge in mortgage loans, according to data from the Bank of Korea (BoK).

This offset the one-off decline from the previous month, reports Yonhap. In May, banks recorded a $1.3b (KRW1.6t) tumble, which was blamed on repayments of loans by customers after the initial public offering of battery maker SK IE Technology. 

A large number of bank customers took out loans from local banks to apply for SK IE Technology's IPO subscription.

The central bank said June's growth is mainly thanks to a surge in mortgage loans. Mortgage loans expanded by about $4.3b (KRW5t) to about $650b (KRW752.2t) in June, extending the previous month’s $3.5b (KRW4t) increase. 

Unsecured and other non-mortgage loans grew by $1.13b (KRW1.3t) over the same period, reversing the $4.8t (KRW5.5t) decline in May.

For the first half of the year, the local bank’s household loans hit a fresh record in terms of first-half increase as total loans soared by over $36.3b (KRW41.6t). This is the largest first-half increase since data tracking began in 2004, according to the BoK.

(KRW1 = US$0.00087)