South Korean banks experienced their sharpest rise in credit loans during May, marking their fastest growth in over five years. This surge, according to Sunday’s data, indicates a growing trend of investors securing loans to buy stocks amidst a robust and record-breaking market rally.
The total outstanding credit loans across five prominent South Korean lenders – KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup – reached 107 trillion won (approximately $70.9 billion) by Friday, based on figures compiled by these banks.
This aggregate amount demonstrated a significant increase of 2.65 trillion won from the close of April, translating to a substantial 2.55 percent rise on a monthly basis.
Such a rapid pace of growth for credit lending has not been seen since April 2021. At that time, the benchmark Korea Composite Stock Price Index (KOSPI) first exceeded the 3,200-point threshold.
More recently, the KOSPI has dramatically surged past the 8,000-point level. This remarkable ascent is primarily fueled by robust gains among chipmakers and intense demand for artificial intelligence (AI) semiconductors. The index concluded Friday’s trading session at 8,476.15.
In stark contrast to the burgeoning credit lending, growth in mortgage loans has remained relatively subdued.
Specifically, the total outstanding mortgage loans at these five South Korean banks reached 612.27 trillion won by Friday. This represented a modest increase of only 25 billion won over the previous month.
