5 major commercial banks September increase rate ‘4.88%’
Close to the financial authorities’ target of ‘5-6%’
In September, despite various management measures, ‘spiking’
With interest in whether the Financial Services Commission’s additional measures for household loans to be announced this month will include measures to regulate cheonsei loans, on the afternoon of the 28th of last month, a notice about jeonse loan products was posted on the exterior wall of a commercial bank in Seoul. yunhap news
Although commercial banks are implementing intensive measures to prevent the increase in household loans, the increase in household loans at major commercial banks in September was rather higher than in the previous month. As long as the increase does not stop, it is inevitable next month to reach the target of total household loans within the year (5-6% per annum) suggested by the financial authorities. Considering that household loan demand is usually concentrated in the fourth quarter, the bitter cold season for loans is expected to continue until the end of the year.
According to the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) on the 1st, the average household loan growth rate in September was 4.88% compared to the end of last year. Compared to the 2.83% at the end of June, it increased by more than 2 percentage points in the third quarter alone. The increase in September was 0.6 percentage points higher than the previous month and exceeded the increase in the previous month (0.52 percentage points). It means that various restrictions such as suspending loans, raising interest rates, and reducing the limit, which were implemented in earnest in September, did not work.
With the unstoppable increase, the lights of individual banks also fell. NH Nonghyup Bank, which already took an unprecedented measure of ‘loan suspension’ as the growth rate of household loans exceeded 7% in July, recorded 7.29% at the end of September, still exceeding the target. NH Nonghyup Bank temporarily suspended new housing mortgage loans and jeonse loans until the end of November, but considering the increase, it is unclear whether it will resume within this year.
Other banks also saw their growth rate surge due to the balloon effect from NH Nonghyup Bank. Hana Bank recorded 5.19%, entering the lower end of the target of the financial authorities (5%). Kookmin Bank recorded the largest increase this year, recording 4.90%, up 1.27 percentage points from the previous month. In response, Kookmin Bank began measures to limit the limit of the jeonse loan to ‘within the range of the increase in the jeonse price (loan limit of 200 million won)’ from the end of September. Shinhan and Woori Bank, which were relatively safe, also rose from ‘2 and 3%’ to ‘3/4%’ respectively.
As the rapid growth is spreading to foreign banks following domestic commercial banks, SC First Bank will temporarily suspend sales of variable rate products that apply 1-year and 3-year financial bonds as the base rate among ‘First Home Loans’, the main mortgage loan products, from the 7th. made it a key
With the average household loan growth rate approaching 5%, the loan cliff is expected to continue until the end of the year. The five major commercial banks have already exhausted about 70% (32.7 trillion won) of their total loans (up to 40.2 trillion won) this year, with only 7.5 trillion won remaining in their warehouses.
A commercial bank official said, “The fourth quarter is usually the quarter with the highest demand for loans such as marriage and moving,” and “banks will mobilize additional measures until the end of the year at least to catch the increase.”
Kim Jeong-hyun reporter virtu@hankookilbo.com
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