Loan interest rates are on the rise, with commercial banks adjusting their additional interest rates accordingly. Despite efforts by financial authorities to tighten household loans, there has been no slowdown in the increase of household loans, including home mortgage loans. To curb loan demand, banks are lowering favorable interest rates and raising additional interest rates. Woori Bank recently raised interest rates on home loans and jeonse loans, while Hana Bank reduced the interest rate reduction rate on certain loan products. Kookmin Bank also raised the interest rate on home loans. Shinhan Bank and NH Nonghyup Bank are considering raising loan interest rates as well. This increase in interest rates is a response to the request from financial authorities to curb loan demand. The increase in loan interest rates is seen as a decision to ensure the soundness of the banking sector and to reduce the risk of unrecovered loans in the future. However, there may be some influence from the authorities as the entire banking sector is raising additional interest rates at the same time. The increase in interest rates is expected to continue as the sudden increase in US Treasury interest rates has impacted the domestic financial market. Despite the increase in interest rates, the banking sector predicts that there will be no further increase in additional interest rates in the near future. In other news, Shinhan Bank has successfully issued foreign currency Formosa bonds worth $500 million, demonstrating its foreign currency acquisition capabilities. The Korean Federation of National Credit Unions is set to hold a public recruitment for new IT workers in 2024, and Hana Life Insurance has launched a 100% mobile flat mortgage loan. KB Kookmin Card has also launched a new check card with a character design.
Loan interest rates rise again… Banks adjust additional interest rates
Commercial banks have started increasing lending interest rates one after the other. Although the financial authorities have stepped in to tighten household loans, the increase in household loans, including home mortgage loans, is not slowing down. Accordingly, banks are interpreted as lowering favorable interest rates and raising additional interest rates to suppress the demand for loans.
On the 13th, Woori Bank raised the interest rates on home loans and jeonse loans by 0.1 to 0.2 percentage points and 0.3 percentage points, respectively. Accordingly, the variable interest rate for home loans rose to 4.53-5.73% based on the new COFIX, and the interest rate for jeonse loans rose to 4.29-5.29%.
Since the 1st, Hana Bank has reduced the interest rate reduction rate for ‘Hana 1 Q Flat Loan (mixed interest rate)’ and ‘Hana 1 Q Home Mortgage Loan (mixed interest rate)’, which are not face to face face loan products on the Hana 1 Q mobile app, 0.15% point, effectively lowering the interest rate.
Kookmin Bank also raised the interest rate on home loans by 0.1 to 0.2 percentage points on the 11th, raising the current blended interest rate from 4.24 to 5.64% to 4.34 to 5.74%, and the interest rate for variable home loans from 4.23 to 5.84% to 4.44 to 5.84%. Shinhan Bank and NH Nonghyup Bank are also considering raising loan interest rates.
This increase in the interest rate was achieved as banks adjusted their additional interest rates and raised lending rates. The additional interest rate is an interest rate that is used taking into account costs and profits, such as bank financing and labor costs. Banks set lending interest rates by adding an additional interest rate to the reference interest rate such as COFIX or bank bonds.
This increase in interest rates on loans is interpreted as the effect of the financial authorities’ request to stop the demand for loans to households.
An official from the banking sector explained, “Raising the loan interest rate by increasing the additional interest rate is a decision on soundness,” and added, “In this period of high interest rates, an increase in loans equates to an increase in r the possibility of an increase in unrecovered loans in the future.”
However, he added, “There is a portfolio management aspect, but it cannot be said that there is no influence from the authorities as the entire banking sector is raising the additional interest rate at the same time.”
In fact, since household loans have increased rapidly recently, the financial authorities held a ‘Household Debt Status Review Meeting’ with the Ministry of Strategy and Finance and the Bank of Korea on the 12th to check trends in household loans and discuss ways to prevent the demand. .
Trends in the increase/decrease of home loans in the banking sector / Graphic = Bizwatch
Home loans are showing rapid growth. According to the ‘Financial Market Trends in September 2023’ data released by the Bank of Korea, bank household loans last month increased by 4.9 trillion won compared to the previous month. ▷ Home loan growth ‘slows down’… Mortgage amount exceeds KRW 6 trillion (Oct 12)
Accordingly, interest rates on loans are expected to maintain an upward trend for the time being. This is because the sudden increase in US Treasury interest rates has had an impact on the domestic financial market. Accordingly, interest rates on financial bonds (bank bonds), which are used as a standard for calculating loan interest rates in the banking sector, also rose. The interest rate on 5-year bank bonds, which is the standard for fixed interest rates on mortgage loans, reached a record high of 4.795% on the 4th.
However, the banking sector is of the position that there will be no further increase in additional interest rates for the time being. A banking industry official predicted, “For banks, it is more profitable to issue a large number of loans at low interest rates in the form of multiple interest rates, so it is unlikely that banks will raise the interest rate extra. again anytime soon.”
Shinhan Bank successfully issues $500 million worth of foreign currency Formosa bonds
Shinhan Bank announced on the 13th that it had successfully issued foreign currency Formosa bonds worth USD 500 million on the 12th. This bond is a 5-year maturity floating rate bond, and the issue interest rate was determined to be 1.08% added to the USD SOFR (Safe Overnight Funding Rate) interest rate.
In April 2020, Shinhan Bank also successfully issued $500 million in bonds, the largest amount of Korean Formosa bonds, in the Taiwan capital market. Shinhan Bank explained that it has successfully completed the issuance of Formosa bonds to investors in Taiwan despite increasing uncertainty in the international financial market, such as sharp fluctuations in US Treasury interest rates and geopolitical risks in the Middle East.
Initially, this bond issue was supposed to be worth $300 million, but demand from domestic and foreign investors exceeded expectations, so it was raised to $500 million. In addition, it demonstrated its foreign currency acquisition capabilities, such as reducing acquisition costs by lowering interest rates by more than 0.1% compared to general global bonds.
A Shinhan Bank official said, “It is significant that we were able to issue higher amounts that exceeded the target amount at a relatively low interest rate despite uncertain market conditions,” and added, “We hope to have a positive influence on interest rate decisions when domestic institutions issue foreign currency bonds in the future,” he said.
Korea Federation of Credit Unions to hold public recruitment of new IT workers in 2024
The Korean Federation of National Credit Unions will hold an ‘open recruitment of new IT employees of the Korean National Credit Union Federation 2024’.
According to the credit union on the 12th, this recruitment is for a senior position in the field of IT development and management, and there are no restrictions on age, gender, education, or major. However, applicants must have at least one of the following certifications: information processing engineer, C, JAVA, SQL, RDB (Oracle / Tibero), system, N / W, and security.
The recruitment schedule is to receive applications through the recruitment site for 10 days from the 22nd to the 31st of this month, and for those who pass the document screening, a two-day written exam (ability test , job eligibility test, job knowledge test. , and online coding test) from the 18th of next month. ) is taken. After that, the first interview with working staff and the second interview with executives will take place from the end of November, and the final successful candidates will be published on the National Federation of Credit Unions website at the end of December.
Hana Life Insurance launches 100% mobile flat mortgage loan.
Hana Life Insurance announced on the 13th that it has launched the Hana Life Apartment Mortgage Loan, which is 100% mobile from loan application to execution. This is the first time in the insurance industry that a one-stop loan is provided on a mobile phone without submitting any documents.
For this product, all procedures are carried out through the Hana Life Mortgage Loan app without visiting a branch, so you can check the loan limit and interest rate within 3 minutes by simply entering information.
The explanation is that documents required for loans, such as income documents and employment documents, are submitted automatically by scraping, and documents such as seals, seal certificates, and registration certificates do not need to be submitted by using electronic registration.
The Hana Life Mobile Flat Mortgage Loan is for customers who can provide proof of income, such as working, business or pension income earners. If the price of the apartment can be confirmed by KB Real Estate, you can apply for everything from living stabilization funds to apartment purchase funds.
The lowest interest rate from this month is 5.15% per annum, and the repayment method is repayment in equal installments of principal or equal installments of principal and interest. The loan period is up to 40 years, and the loan limit is up to 1 billion earned.
KB Kookmin Card Launches ‘Tosimi Check Card’
KB Kookmin Card announced on the 13th that it has launched the ‘KB Kookmin Tosim Check Card’, which has Tosim’s character design applied to the ‘KB Kookmin Check Check Card’.
This card can be used in △convenience stores (UN Convenience Store) △Coffee (Starbucks) △Movies (CGV) △Shopping (10 by 10) △Simple online payment (Naver Pay, Kakao Pay, SSG Pay) △Beauty (Olive Young , Opticians) △ Online bookstores (YES24, Kyobo Book Center) When using 9 areas, including △ Culture (Interpark Ticket) △ Public transport (bus and subway), a discount of 1 to 2,000 is provided per transaction in depending on the previous month’s usage performance.
When paying more than 10,000 won per transaction in the convenience store, coffee, movie, and shopping places, 20,000 won per transaction in the simple online payment, beauty, online bookstore, and culture, and 30,000 or more won per transaction in the public shipping area, if the previous month’s usage record was 300,000 won or more per transaction There is a discount of 1,000 won (monthly limit of 10,000 won). If the previous month’s usage amount exceeds 600,000 won, a discount of 2,000 per transaction is provided (monthly limit of 20,000 won).
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