Single stock debt overheated… Emergency call for bank notes from the Financial Supervisory Service

The balance of personal credit loans increased by 453 billion won in one week this year, only at the five major commercial banks this year. About 7400 negative bankbooks have been newly opened, and the number of money withdrawn from the existing negative bankbooks has increased to 2,000 per day, doubled from the end of last year.

As the KOSPI index broke the record for each day, an analysis found that the influence of individuals drawing stock investment funds from credit loans was large. On the 11th, the Financial Supervisory Service decided to hold an emergency inspection meeting with major bank executives.

According to five major banks including Shinhan Kookmin Hana Woori Nonghyup on the 10th, the credit balances of these banks increased from 133.6482 billion won at the end of December last year to 134.101.5 billion won on the 7th. In December, some banks stopped lending altogether, and the balance of their credit loans decreased by 45.5 billion won from the previous month, decreasing in 11 months. This is because the financial authorities ordered banks to limit loans out of concern that the surge in credit loans would fuel the real estate market overheating. Banks have suspended credit loans of more than 100 million won to high-income earners with an annual income of 80 million won or more and expanded the application of the total debt principal repayment ratio (DSR).

At the beginning of the year, as soon as banks reopened their personal credit doors, the’loan rush’ reappeared. An official from the banking sector explained, “This year’s increase is comparable to that of the second half of last year, when a large-scale’spiritual loans’ for housing purchases were made.” Banks are citing the rising stock market as the cause of the recent surge in lending. According to the Korea Financial Investment Association, the deposit of investors in securities companies, which means stock market funds, increased from 65 trillion won at the end of last year to 69 trillion 271.8 billion won on the 7th, about 4 trillion won in a week. The analysis of the banking sector is that the anxiety of not knowing when the loan restrictions will be implemented again has also affected.

On the 11th, the Financial Supervisory Service decided to hold a video conference with vice presidents in charge of loans at major banks. The purpose of this is to report on the status of credit loans by bank and to examine the reasons for the rapid rise in credit loans.

○”The reason for the loan is different from last year”

The reason why the government introduced DSR regulations for high-income people in November last year is because it believes that credit loans raise real estate prices. The balance of personal credit loans of five major banks, including Shinhan National, Woori Hana, and Nonghyup, rose 4,849.5 billion won compared to last November, recording the largest monthly increase. This is because there was a last-minute demand to receive credit loans before the regulation was implemented.

The Financial Supervisory Service and banks believe that the rise in credit loans this month is different from that of this month. This is because, while the DSR regulation, which guilty of high-income earners (yearly income of 80 million won or more) (100 million won), has already been enforced, the demand for additional credit loans for real estate purchases is believed to have faltered. Banks analyze that the demand to buy cryptocurrencies such as stocks rather than real estate and bitcoin rather than real assets had a big impact.

○ Credit loan growth in January is unusual

Usually, the credit balance in January each year tends to decrease significantly compared to the previous month. An official from a commercial bank explained, “In January, financial products such as change of existing loans and regular deposits are re-subscribed.” “In the case of salaried people, there are many cases of repaying loans with year-end bonuses, so the balance of the credit is reduced. In January of last year, the balance of credit loans from the five major banks recorded 109.686 trillion won, down 2247 billion won from the previous year.

The reason why the unusual’January credit loan increase’ appeared this year is complex. At the end of last year, major banks closed major credit loans to lower the share of household loans and increase the share of corporate loans. This is because banks that introduced Basel III, an international soundness standard along with government regulations, had to sharply reduce the proportion of household loans. As soon as this year’s measures were released, banks explained that the’balloon effect’ appeared. Here, the demand for some common people’s loans, which was suppressed at the end of the year, appeared, and the stock market and bitcoin rally at the beginning of the year began to increase. An official from the banking sector said, “It is difficult to explain the sharp rise in credit loans except for the stock market and the price of bitcoin that rise after sleep.”

○ The policy to curb high credit loans continues

Some analyzes say that it is far from the’panic loan’. This is because the weekly increase of 453 billion won is less than the average of the weekly increase of the five major banks in the second half of last year (728.2 billion won). There is also a decline in daily growth of 64.7 billion won (last 5 days), 64.4 billion won (6 days), and 44.8 billion won (7 days).

Nevertheless, the government’s stance of restraining credit loans flowing into the real estate market has not changed. The Financial Supervisory Service has been closely monitoring the number of credit loans exceeding 100 million won since the end of last year. A bank official said, “The financial authorities expressed concern about high-priced credit loans that could flow into the housing market.” “Even though banks resumed credit loans earlier this year, they did not increase the maximum loan limit, which was reduced to 100 million won.” In the banking sector, for this reason, it is believed that the FSS’s calling for the bank’s vice-presidents is more of an intent to understand the current loan situation than to take urgent measures such as additional credit restrictions.

○ The loan equation has become more difficult to solve

The government’s concern is that excess liquidity is affecting the lending market, such as stocks and cryptocurrencies, following real estate. It is an analysis that it is difficult to dry or promote various indices while’going up after sleeping’.

There are observations that change is inevitable even in the stance of loan regulation. When the government announced the DSR regulation in November last year, it made a plan to convert the DSR standard for each financial sector and financial company into a DSR for each borrower. DSR is the repayment of principal and interest for all household loans divided by annual income. In the case of commercial banks, DSR 70% of total loans were less than 5%, and more than 90% of loans had to be managed at less than 3%, and the individual DSR standard was applied only to homeowners with more than 900 million won. It means.

However, there were also many concerns that super-strong DSR regulations could curb lending to ordinary people suffering from Corona 19. The government planned to come up with a comprehensive loan policy such as adjusting the monthly increase limit (2 trillion won) for the entire banking sector during this month. In the midst of this, the government’s steps were twisted as’debt investments’ appeared in the stock market and the virtual currency market.

The FSS recently received plans for household loans, including credit loans, from banks this year. A bank official said, “The Financial Supervisory Service offered to give feedback on the proposed household loan plan by the end of this month, but it seems that the current trend has changed.” In the market, there is an analysis that there is no need for a sharp rise in stock and cryptocurrency prices and coordination with the housing policy, which the Minister of Land, Infrastructure and Transport Byun Chang-heum decided to release soon. An official in the financial sector said, “The government expressed concern that credit loans affect the real estate market, not the stock market,” and said, “As there are more variables that will affect the loan market, it is more difficult to overcome the situation. That’s it.”

Reporters Daehoon Kim/Soram Jeong/Jongseo Park [email protected]