In October 2024, the outstanding balance of household loans across all financial sectors rose KRW6.6 trillion (preliminary), growing at a faster pace compared with the previous month (up KRW5.3 trillion).

(By Type)  Home-backed mortgage loans rose KRW5.5 trillion across all financial sectors, increasing at a slower pace compared with the previous month (up KRW6.8 trillion). Mortgage loans in the banking sector continued to rise at a slower pace (up KRW6.1 trillion → up KRW3.6 trillion).

Other types of loans increased KRW1.1 trillion overall, edging back up in both the banking (down KRW0.5 trillion → up KRW0.3 trillion) and nonbanking (down KRW0.1 trillion → up KRW0.8 trillion) sectors.

(By Sector)  The pace of household loan growth compared with the previous month decelerated in the banking sector while shifting back up in the nonbanking sector.

In October, banks saw an increase of KRW3.9 trillion in household loans, a slowdown from the increase of KRW5.6 trillion a month ago. The growth of policy-based loans stayed at a similar level (up KRW2.1 trillion), but banks’ own mortgage loan issuance grew at a slower pace (up KRW4.0 trillion → up KRW1.5 trillion) due to the self-regulatory move to tighten household loan issuance in the banking sector. Other types of loans including credit loans turned back up from a month ago (down KRW0.5 trillion → up KRW0.3 trillion) due to the effects of demand for IPO subscriptions.

The nonbanking sector saw an increase of KRW2.7 trillion in household loans, which expanded at a faster pace compared with the previous month (down KRW0.3 trillion). Mortgage loans in the nonbanking sector went up KRW1.9 trillion from the rise of KRW0.7 trillion a month ago led by group lending for new apartment subscriptions. Other types of loans increased KRW0.8 trillion from the decline of KRW1.0 trillion a month ago led by credit card and insurance policy-based loans. Mutual finance businesses (up KRW0.9 trillion), specialized credit finance businesses (up KRW0.9 trillion), insurance companies (up KRW0.5 trillion), and savings banks (up KRW0.4 trillion) all saw increases in household loans.

(Assessment)  The FSC held a meeting with related authorities and industry groups on November 11 to discuss recent trends of household debt growth and further plans. At the meeting, authorities suggested that it is necessary to continue to stay vigilant on the pace of household debt growth especially due to the expanded pace of growth seen in the nonbanking sector. However, given that each nonbanking sector shows different characteristics in terms of its growth trend, authorities shared a common view on the need for each nonbanking sector to prepare and implement appropriate measures on its own. To this end, the financial authorities plan to ask nonbanking sectors to draw up their own household debt management plans for the remainder of this year and require them to submit management plans for 2025 as it is currently required in the banking sector. For those sectors and financial companies that have recently seen particularly high growth trends, the Financial Supervisory Service (FSS) will perform inspections to check their compliance with the second phase stressed debt service ratio (DSR) rules and credit assessment guidelines.

* Please refer to the attached PDF for details.