Banks Loaning Credit from New Year
According to the financial sector on the 3rd, Woori Bank will resume the sale of the non-face-to-face credit loan product’Woori WON’, which was discontinued on the 11th, this month. However, the strict standards applied to high-income borrowers remain the same. It lowers the maximum limit to 100 million won and provides limited loans.
KB Kookmin Bank also lifts the restrictions on household credit loans that were enforced in December. Kookmin Bank in principle blocked household loans exceeding 100 million won on the 14th of last month, and all new household credit loans exceeding 20 million won on the 22nd. Other banks’ mortgage loans are replaced by Kookmin Bank’s mortgage loans.
However, Kookmin Bank also plans to maintain the credit limit for high-income professionals. Since the end of September, Kookmin Bank has lowered the credit limit for professional workers from a maximum of 400 million won to 200 million won.
Shinhan Bank also accepts non-face-to-face applications for office workers, including’convenient office worker credit loans’. This product is Shinhan Bank’s representative mobile credit loan product. Shinhan Bank has not received applications for this product from December 15th.
Housing and officetel mortgage loans through loan counselors and recruitment of all-out household loans will also resume from this month. Home mortgage loans for the purpose of life stability fund are also resumed.
From the 1st, Kakao Bank receives applications for new’minus bankbook credit loans’ for high-credit workers. Kakao Bank also stopped applying for a new negative passbook and increasing the balance on the 17th of last month.
NH Nonghyup Bank is also raising the preferential interest rate for household loans, which had been reduced from the 4th. The reduction of the preferential interest rate limit has in effect raised interest rates. The Nonghyup Bank raised the maximum preferential interest rate for home mortgage loans under the variable rate to 1.4% from 1.0% at present. Credit loans raise the maximum preferential interest rate from 0 to 0.25% to 0.8 to 1.2%.
Restriction on large credit loans for high income earners is maintained
Financial authorities have recommended commercial banks to restrict credit loans since the second half of last year. This is due to the judgment that credit loans have led to ‘zeroth’, creating overheating in the real estate and stock markets.
In fact, the increase in household loans of the five major commercial banks (Shinhan, Kookmin, Hana, Woori, and Nonghyup Banks) increased by 9.2% from the beginning of the year to 56.2154 billion won in January-November 2020. During the same period (January-November), the credit loan growth of the five major commercial banks was 21.6%. It was an unprecedented rate of increase.
From the perspective of banks, soundness targets are also the reason for lending. In the case of Shinhan, Kookmin, Woori, and NH Nonghyup, which introduced the capital adequacy regulation’Basel III’, regulations were strengthened in December as they had to meet the level of regulations in June and December every year.
However, as the confinement period for credit loans intensified, a voice came out from the common people suffering from Corona 19 and the like. The reason is that even people in need of urgent supply suffer from having to tighten loans to prevent overheating in the real estate market or stock market.
However, it is expected that the authorities will continue to regulate credit loans to high-income people or loans that are large at once. In addition, the authorities are also expected to manage the increase in credit loans by continuing to manage the total amount to match the increase in credit loans to KRW 2 trillion per month.
An official from the financial sector said, “By December, the authorities were in a position to unconditionally curb household loans, but now it seems to be moving toward a two-track policy that manages the total amount while gradually solving the pool and reducing the reduction.”
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