Credit loan growth still manageable: regulator
This photo shows the dealing room of Hana Bank in central Seoul, Nov. 14. Yonhap
The financial regulator said Monday credit loan growth is still manageable despite its recent spike in tandem with a stock market rally.
According to the Financial Services Commission (FSC), non-mortgage household loans, including credit loans, had added 1.4 trillion won ($959 million) from a month earlier to 238 trillion won as of end-October, marking a turnaround from a 500 billion-won on-month drop the previous month.
Home-backed loans, on the other hand, gained 2.1 trillion won to 934.8 trillion won over the cited period, marking a sharp slowdown from a 3.9 trillion won rise in September.
The regulator said credit loans typically increase in October and November following summer vacations and holidays.
However, credit loans spiked recently as a growing number of investors took out loans to join a stock market rally.
Last week, FSC Chairman Lee Eok-won called for proper risk management amid a growing number of investors taking out loans to invest in stocks, while noting that the recent increase in credit loans does not pose a major threat to overall financial stability.
The FSC renewed the call, urging individuals to be more vigilant in managing their financial risks, while vowing to closely monitor credit loan growth.
For the first 10 months of the year, credit loans extended by all financial institutions declined by 2 trillion won, according to the regulator.
Korean stocks have been among the world's best performers this year, supported by government-led market reform measures and optimism over the artificial intelligence (AI) boom.