SEOUL, Sept. 2 (Yonhap) — South Korean banks’ credit loans to individuals shot up by more than 4 trillion won in August from a month earlier, the largest-ever monthly gain, industry data showed Wednesday.
Outstanding unsecured loans to individuals by five major lenders — KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup — totaled 124.3 trillion won (US$105 billion) last month, up 4.1 trillion won from July.
KB Kookmin registered the largest monthly hike of 1.06 trillion won, followed by Shinhan with 1.05 trillion won.
August’s spike was attributed to consumers’ rush to borrow money from banks amid low interest rates to purchase apartments or invest in higher-yielding stocks.
Analysts said individuals probably resorted more to unsecured bank loans due to tougher mortgage regulations aimed at curb soaring housing prices.
Ultra-low interest rates have sent retail investors taking out bank loans to invest in stocks, they added. Also responsible was the coronavirus outbreak that has forced those without jobs and furloughed people to borrow money from banks to make ends meet.
Meanwhile, home-backed loans extended by local banks increased by 4.2 trillion won in July from the previous month, according to the data.
The outbreak of COVID-19, whose first confirmed case was reported in South Korea in late January, has pounded the country’s economy by crimping exports and consumer spending.