The growth pace of household loans across the financial sector slowed slightly last month compared to the previous month.

Amid a cooling in stock-backed borrowing following stock market adjustments, the growth in both mortgage loans and other types of loans narrowed simultaneously.

According to the financial market trends released by the Bank of Korea on the 14th, the balance of household loans (including policy mortgage loans) at deposit-taking banks stood at 1,194.8 trillion won at the end of July, up 5.4 trillion won from the end of June.

After surging by 7.6 trillion won in June to mark the largest increase in 22 months since August 2024 (+9.2 trillion won), the growth scale narrowed somewhat.

Looking at loans by type, the balance of mortgage loans reached 948.4 trillion won, an increase of 3.4 trillion won.

This was a smaller increase than the 4.3 trillion won recorded in June.

The balance of other loans also rose by 2 trillion won to 245.4 trillion won, similarly showing a reduced growth scale compared to June (+3.3 trillion won).

Lee Seung-yeop, deputy director of the Market Operations Team at the Bank of Korea, explained, "While mortgage loans continued to be influenced by the increase in housing transactions in the Seoul metropolitan area during April and May, the growth scale narrowed due to the continued decline in jeonse (lump-sum housing deposit) transactions and a slowdown in demand for intermediate payment installments on pre-sold properties."

He added, "Other loans experienced a smaller increase due to factors such as a slowdown in individual stock investments, but continued to maintain a high growth rate compared to typical years."

Regarding the impact of the government's tax code revision and comprehensive financial measures to stabilize the housing market, Lee forecasted, "They could have a complex impact on loan demand from August onward."

However, he added, "It is difficult to pre-emptively judge the trend of household loans because it is determined by multiple factors, including not only loan demand but also the lending attitude of financial institutions and the housing market situation."

According to household loan trends released by the Financial Services Commission and the Financial Supervisory Service on the same day, total household loans across the entire financial sector grew by 6.2 trillion won in July, showing a reduced expansion compared to June (+8.3 trillion won).

Mortgage loans increased by 3.5 trillion won, a smaller increase than the previous month (+4.5 trillion won).

Both the banking sector (+4.3 trillion won to +3.4 trillion won) and non-bank financial sectors (+300 billion won to +100 billion won) saw their growth scales narrow.

Other loans also grew by 2.7 trillion won, a smaller increase than the previous month (+3.8 trillion won).

This was largely influenced by the growth in credit loans slowing down to 2 trillion won from the previous month (+2.6 trillion won).

By sector, household loans from banks increased by 5.4 trillion won, with the growth scale narrowing compared to the previous month (+7.6 trillion won).

The growth scales for banks' own mortgage loans (+2.9 trillion won to +2.5 trillion won), policy-backed loans (+1.4 trillion won to +900 billion won), and other loans (+3.3 trillion won to +2 trillion won) all decreased.

Household loans in the non-bank financial sector rose by 800 billion won, maintaining a similar growth scale to the previous month (+800 billion won).

While the cooperative financial sector shifted to a decline (+200 billion won to -700 billion won), savings banks (-200 billion won to +500 billion won) and specialized credit finance companies (-200 billion won to +300 billion won) turned to an upward trend.

Insurance companies (+1.1 trillion won to +700 billion won) saw their growth scale narrow.

The balance of corporate loans at deposit-taking banks stood at 1,421.1 trillion won at the end of July, an increase of 7.7 trillion won from the end of June.

Amid continued corporate working capital demand for corporate bond repayments, large corporation loans grew by 3.8 trillion won due to the re-handling of amounts temporarily repaid at the end of the previous quarter.

SME (small and medium-sized enterprise) loans also increased by 3.9 trillion won, driven by demand for value-added tax payments and the expansion of loan sales by some banks.

Bank deposits decreased by 30 trillion won.

This was largely driven by demand-deposit accounts plunging by 80.8 trillion won—the largest decline on record since relevant statistics began in January 2002—due to seasonal factors and the deposit of corporate funds into time deposits.

Conversely, time deposits increased by 42.3 trillion won, driven by banks securing loan resources, the need to manage regulatory ratios, and the deposit of surplus funds by certain large corporations.

Deposits at asset management companies dropped by 42.8 trillion won.

Influenced by falling stock prices, 56.2 trillion won flowed out of equity funds, and 13.8 trillion won left other funds.

Equity funds experienced their largest decline on record since statistics began in January 2004.

In May, they had surged by a record 58.8 trillion won, followed by a 3.5 trillion won increase in June.

Money Market Funds (MMFs) expanded by 27.2 trillion won due to the re-inflow of corporate funds.