The household loan balance of the five major banks in South Korea increased after three months of decline, while demand deposits saw their largest growth in two years.
In February, the household loan balance of South Korea's five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Bank—showed an increase for the first time in three months, rising to 765.87 trillion won. This increase followed two consecutive months of decline, which saw a reduction of over 5 trillion won. Specifically, the housing mortgage loans also saw a notable rise, increasing by nearly 6 trillion won compared to January, after experiencing a decline the previous month. This indicates a potential recovery in the housing loan market after a stretch of decreases that commenced in January.
On the savings side, the five major banks reported that their regular deposit balance increased to nearly 947 trillion won, marking a growth for the first time in three months. Demand deposits surged significantly, increasing by over 33 trillion won, which is the largest rise since March 2024. This substantial growth in demand deposits suggests that consumers are currently more inclined to hold liquid assets, possibly in response to uncertain economic conditions or expectations of further interest rate changes.
Overall, these shifts in household loans and deposits may signal changing consumer behavior and market conditions in South Korea, reflecting an evolving economic environment after a period of stagnation. Analysts will be closely monitoring these trends to assess their implications on overall economic stability and growth in the coming months.
