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A central bank official explains household debt statistics at the Bank of Korea building in central Seoul’s Jung District on Wednesday. [BANK OF KOREA]
Household debt hit a new high of 1,637.3 trillion won ($1.39 billion) in the second quarter due to a rise in mortgages and loans for stock market investments, it said on Wednesday. the Bank of Korea (BOK).
Household debt rose 1.6% from three months earlier, the fastest quarterly increase since the central bank began compiling statistics in their current form in 2002.
Household debt is the sum of household loans and credit card purchases made by financial institutions.
Loans from financial institutions reached 1,545.7 trillion won in the April-June period, up 1.6 percent from the previous quarter.
Despite strict real estate measures taken by the government, mortgage lending reached 873 trillion won in the second quarter, more than double the amount in the same period last year.
Loans borrowed to buy stocks rose 10.3% from three months earlier to 7.9% trillion won in the second quarter – the largest increase in history.
The credit card purchase balance was 91.6 trillion won, up 2.2 percent from the first quarter. This signals that consumer confidence has recovered slightly from the first quarter, when the same number fell 6.4% from the previous quarter.
Amid rising numbers, the Financial Services Commission (FSC) plans to monitor banks in a bid to prevent them from over-lending.
FSC Vice Chairman Sohn Byung-doo urged banks to adhere to lending restrictions at a meeting on Wednesday. He urged banks to “pay particular attention to loans used to buy stocks or property”.
BY KANG JAE-EUN [[email protected]]
