S. Korea's household debt up near $9 bn, largest ever for the month of July

[Photo by Kim Ho-young]

South Korea’s household lending gained nearly 10 trillion won ($8.65 billion) last month as house purchase and rental continued in the local real estate market coupled with retail investors’ fresh capital flow into the IPO of Kakao Bank, data showed Wednesday.

The outstanding balance of household lending extended by banks reached 1,040 trillion won as of the end of July, up 9.7 trillion won from a month earlier.

The July increase, which is smaller than that in April (16.2 trillion won), but larger than in June (6.3 trillion won), marks the largest growth for the month in history, according to the Bank of Korea (BOK) data.

The amount of home-backed loans issued by banks saw a 6.1 trillion won on-month increase in July to reach 758.4 trillion, a faster gain than in June. Loans for Jeonse or key money deposit for house rental alone increased by 2.8 trillion won, surpassing the June growth of 2.2 trillion won.

Credit borrowings and other loans in July more than doubled from the previous month with a 3.6 trillion won increase.

The outstanding balance of won-denominated business loans extended by banks amounted to 1,033.5 trillion won at end-July, up by 11.3 trillion won from June.

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