Following the Bank of Korea’s base rate hike, the interest rate applied to credit transactions for borrowing money to buy stocks has exceeded 10% (based on more than 90 days) this month.
Although pessimistic voices about the stock market outlook are becoming stronger, credit transaction interest rates have also skyrocketed, leading to a sharp drop in overall credit loan balances. In addition, the fact that there were many forced sales where stock prices had plunged and forced sales were made in a situation where borrowed money could not be repaid also affected the balance of credit loans.
According to the Financial Investment Association on the 13th, Hyundai Motor Securities applied an interest rate of 10.3% from this month if the credit transaction period of regular customers exceeds 90 days. Earlier, Yuanta Securities also applied an interest rate of up to 10.05%, depending on the customer score and account opening method, even if the credit transaction period is more than 16 days from the last month . KB Securities raised interest rates on credit loans four times this year alone. At the end of January this year, the interest rate on credit loans was 7.5%, but now, if you borrow for more than three months, an interest rate of 9.8% is applied. The average interest rate for each period of 29 securities companies is 3.72% for 1-7 days, 4.76% for 8-15 days, 5.07% for 16-30 days, 5.5% for 31-60 days, 5.72% for 61-90 days. day, 5.94% for 91-120 days Securities companies are expected to continue raising interest rates related to credit transactions in 4Q.
The financial investment industry analyzed that the balance of credit transaction loans decreased as the cost of interest increased as securities companies raised interest rates related to credit transactions one after the other. An official from the financial investment industry said, “The stock market situation is not good, but as interest rates rise, customers who have taken out existing credit loans are repaying them, and customers who want new credit loans are almost disappeared.”
From the 11th, the balance of credit transaction loans increased to 16.63 trillion won from the 11th.
This is a decrease of 2.87 trillion won compared to the 5th of last month (19.5047 trillion won). This is the first time in 23 months since November 2020 that the balance of credit transaction loans has fallen to the level won of 16 trillion.
A significant portion of the investment was disposed of by investors investing in debt through counter trading, which also contributed to the reduction in the rest of the credit transaction loans. An official from the financial investment industry explained, “The proportion of counter-trading has been decreasing since the beginning of this month because the stocks held by investors who survived until the end of last month have been sold through counter-trading. ” However, as some credit transaction loans continue and the stock market environment is expected to deteriorate in the future, counter trading volumes are expected to continue.
On the other hand, according to the ‘Credit Loan Banks by Age Group in Securities Companies for 2020-2022′ received by member of the National Assembly Yoon Young-duk on the same day from the Financial Supervision Service, there’ the gap with the balances of young people under the age of 30 getting bigger as the credit loan balances of those aged 50 and over continue to increase. At the end of 2020, the balance of credit loans was 480.3 billion won for those under 30 years old and 7.8 trillion won for those under 50 years old, which was 16.5 times higher. However, at the end of last year, those under 30 recorded 509.6 billion won, while those over 50 showed a difference of 19.5 times to 9,929.9 billion won. In the first half of this year, those under 30 recorded 321 billion won, and those over 50 increased 25.8 times to 8,269.7 billion won.
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