Bank mortgages increase at a sustained pace in March

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This file photo, taken on February 16, 2021, shows notices of real estate transactions displayed at a real estate agent’s office in Seoul. (Yonhap)

Major South Korean banks saw their mortgages increase at a sustained pace in March despite higher interest rates, industry data showed on Friday.

The country’s top five lenders – KB Kookmin, Shinhan, Woori, Hana and Nonghyup – held 483.2 trillion won ($ 427 billion) in real estate-backed loans at the end of March, up 3.4 trillion won compared to the previous month.

March marks the second month in a row that their combined mortgages have increased by around 3 trillion won. February saw a monthly increase of 3.8 trillion won.

The March increase came despite a rise in bank lending rates. According to central bank data, average bank mortgage rates rose to 2.66% in February from 2.63% in January, the sixth consecutive month of increases.

Industry observers said local lenders have increased risk spreads on loans in an attempt to curb the pace of household lending growth amid rising benchmark rates.

In contrast, these banks’ unsecured loans outstanding stood at 135.4 trillion won at the end of March, up just 200 billion won from the previous month.

Personal loans fell by 55.6 billion won in February after peaking at some 1.6 trillion won in January.

At the end of March, loans to households by major lenders stood at 681.6 trillion won, up 3.5 trillion won from the previous month. (Yonhap)


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