235 employees at 5 major banks hold housing loans above W600m cap

A total of 235 employees at South Korea's five major banks hold outstanding housing loan balances of 600 million won ($447,000) or more, according to an analysis of Financial Supervisory Service data. Their combined outstanding balance stands at 161.53 billion won, accounting for 27.9 percent of the total outstanding housing loan balance held by employees at the five banks. Another 89 employees carry balances exceeding 700 million won.

Democratic Party of Korea lawmaker Min Byung-deok released the findings Monday, based on Financial Supervisory Service data he obtained. The figures cover housing loans extended to employees at the five banks after June 27 last year that still carried an outstanding balance as of the end of July this year.

By bank, Shinhan Bank had the most employees with loans of 600 million won or more, at 168, followed by KB Kookmin Bank with 30, Woori Bank with 16, Hana Bank with 11 and NongHyup Bank with 10. In terms of outstanding balances, Shinhan Bank again led with 112.89 billion won, followed by KB Kookmin Bank at 21.82 billion won, Woori Bank at 10.93 billion won, Hana Bank at 8.49 billion won and NongHyup Bank at 7.35 billion won.

Shinhan Bank also had the most employees with loans exceeding 700 million won, at 56, followed by KB Kookmin Bank with 15, Hana Bank with 8, and Woori Bank and NongHyup Bank with 5 each. The combined outstanding balance for this group totaled 74.62 billion won.

The Financial Services Commission announced measures to tighten household debt management on June 27 last year, capping housing purchase mortgage loans in the Greater Seoul area and regulated zones at a maximum of 600 million won starting the following day. The actual amount a borrower can receive may fall below that ceiling depending on the loan-to-value ratio and debt service ratio, which reflect income and property value.

The loans counted as "600 million won or above" in this tally include cases where contracts were signed or loan applications were submitted before the June 27 measures took effect — making them subject to the previous rules — as well as mortgage loans on properties outside the Greater Seoul area and loans taken out to return jeonse deposits. Shinhan Bank said that of its 56 loans exceeding 700 million won, 47 were subject to the previous rules, five were for the return of jeonse deposits and four were in unregulated areas.

"Even though the government capped housing purchase loans in the Greater Seoul area and regulated zones at 600 million won to manage household debt, 235 employees at the five major banks still hold loans of 600 million won or more," Min said. "Regardless of whether individual loans were illegal, the financial authorities need to verify what criteria were used to apply the previous rules and exemptions, and whether the same standards were applied to ordinary citizens and bank employees alike."