Bank of Korea says household loan originations fall in second quarter

The Bank of Korea said Tuesday that the average amount of new household loans issued per borrower fell to 34.1 million won ($24,684) in the second quarter, a decline of 1.28 million won ($925) from the previous three months.

The central bank attributed the drop primarily to reduced borrowing among people in their 40s, residents of the metropolitan area, and customers of non-bank financial institutions. Average fresh home loans per borrower slid 21.1 million won ($15,256) to 208 million won ($150,596).

Despite the slowdown in new lending, total outstanding household debt per borrower rose 500,000 won ($362) to 97.9 million won ($70,783) by the end of June, while the stock of mortgages climbed 1.87 million won ($1,352) to 162 million won ($117,078).

Borrowers in their 20s were the only age group to increase their uptake of new mortgages, averaging 23.2 million won ($16,786), up 392,000 won ($283) from the first quarter. In contrast, those in their 40s saw the largest reduction in new borrowing, with average originations falling by 5.83 million won ($4,215).

Average new loans in the capital region dropped by 1.93 million won ($1,395), while non-bank lenders saw a decrease of 14.4 million won ($10,404) per customer. Borrowers in their 30s accounted for the largest share of new loans at 32.7 percent, while those in their 40s held the biggest portion of total outstanding debt at 28.5 percent. The metropolitan region represented 59.4 percent of new originations and 58.6 percent of the total balance sheet.

Banks issued 58.3 percent of all new loans and held 61.3 percent of the total outstanding household debt. Mortgages made up 41.0 percent of new lending and 52.5 percent of the total debt stock.