Both mortgage loans and overdraft credit lines at major South Korean banks posted sharp increases last month.
As of Thursday, the combined overdraft balance at the five major banks — KB Kookmin Bank, Shinhan, Hana, Woori and NH NongHyup — stood at 44.47 trillion won ($30.9 billion), according to financial industry sources and Yonhap. That is the highest level since August 2022, when the balance reached 44.77 trillion won.
The overdraft balance moved in waves throughout the month. It rose by 328.9 billion won in the first week (Aug. 1–3), added 37.2 billion won in the second week (Aug. 4–10), and climbed a further 511.1 billion won in the third week (Aug. 11–16). It then fell by 1.44 trillion won in the fourth week (Aug. 17–24), when most salary payments hit accounts, before rebounding by 1.75 trillion won in the fifth week (Aug. 25–30).
The overdraft utilization rate — the share of the maximum credit limit actually drawn — stood at 46.1 percent as of Thursday. Total personal credit loan balances, including overdraft lines, reached 110.05 trillion won as of the same date, the highest since March 2023, when the figure was 111.2 trillion won.
The five banks' total household loan balance stood at 778.79 trillion won as of Thursday, up 3.83 trillion won from the end of June, when it was 774.96 trillion won.
The mortgage loan balance rose by 2.28 trillion won to 617.43 trillion won, compared with 615.15 trillion won at the end of June. The increase accelerated from 1.14 trillion won in May and 1.76 trillion won in June, marking the largest monthly gain since August last year, when mortgage loans grew by 3.7 trillion won.
Industry analysts attribute the continued rise in mortgage and overdraft borrowing to steady demand for home purchases, driven largely by rising housing prices in Seoul and surrounding areas.
The trend persists even as banks have moved to tighten lending. KB Kookmin Bank cut its mortgage loan ceiling from 600 million won to 300 million won in early July, while other banks temporarily suspended loan applications through mortgage broker channels or restricted access to mortgage insurance products. Despite these measures, household lending has continued to grow.
With personal credit loans and mortgage loans rising simultaneously, banks now face serious doubt over their ability to meet the annual household loan growth targets set by financial regulators.
Market watchers also warn that as year-end approaches, banks' remaining lending capacity will shrink further, likely prompting even stricter restrictions on new loans.
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