South Korean banks' credit loans hit $105b in August

Consumers rushed to buy apartments or to simply make ends meet.

South Korea’s five major lenders’ outstanding unsecured loans to individuals totaled $105b (KRW124.3t) in August, up $3.44b from July, reports Yonhap News Agency, based on industry data.

Local consumers reportedly rushed to borrow money from banks amidst low interest rates to purchase apartments or invest in higher-yielding stocks.

KB Kookmin registered the largest monthly hike of almost $890.31b (KRW1.06t), followed by Shinhan with $881.9b (KRW1.05 trillion).

Analysts said individuals probably resorted more to unsecured bank loans due to tougher mortgage regulations aimed at curb soaring housing prices.

Ultra-low interest rates have sent retail investors taking out bank loans to invest in stocks, they added.

Also responsible was the coronavirus outbreak that forced those without jobs and furloughed people to borrow money from banks to make ends meet.

Meanwhile, home-backed loans extended by local banks increased by $3.53b (KRW4.2t) in July from the previous month, according to the data.