Is KOSPI Attractive Now?... Overdraft Loans Jump by 1.8 Trillion Won in Six Days

[Financial News] Banks have moved to rein in household lending by cutting mortgage limits and suspending loan applications, but the rise in lending has not slowed. Household loans at the five major banks increased by more than 3.8 trillion won in just one month, and this year's growth has already exceeded the annual management target submitted to financial authorities by more than 100 billion won.
As of the end of last month, household loans at the five major banks — KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and Nonghyup Bank — stood at 778.7869 trillion won, according to the financial sector on the 2nd. That was up 3.8261 trillion won from 774.9608 trillion won at the end of June. It marked the largest monthly increase since August last year.
The increase was seen in both mortgage loans and credit loans.
Mortgage loan balances reached 617.4287 trillion won, up 2.2831 trillion won from a month earlier. The gain is attributed to continued home-price increases in Seoul, which have kept buying demand steady.
Overdraft loan balances also rose sharply. As of the end of last month, the balance stood at 44.4669 trillion won, up 1.1857 trillion won from the previous month. It was the third straight month of gains in the 1 trillion won range and the largest increase since August 2022.
In the banking sector, the view is that investors who stepped in to buy on the dip after KOSPI fell to the 5,200 level used overdraft loans to do so. As of the end of last month, the utilization rate of overdraft loans at the five major banks was 46.1%.
Total personal credit loans, including overdraft loans, came to 110.0484 trillion won. That was the highest level in three years and four months, since March 2023.
Meanwhile, banks have been raising lending hurdles one after another to slow the pace of loan growth. KB Kookmin Bank cut its mortgage loan limit from 600 million won to 300 million won in early July. Some banks have also suspended loan applications through loan brokers or restricted mortgage insurance enrollment.
However, as household lending continues to grow, the burden of managing total lending volumes has increased further. Excluding policy-backed loans, this year's household loan growth at the five major banks has already exceeded the annual target submitted to the Financial Supervisory Service at the start of the year by more than 100 billion won.
[email protected] Han Young-joon Reporter