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The pace of growth for industry-specific loans reached a 13-year low last year, as declining real estate markets combined with lower manufacturing investments occurred against the backdrop of global uncertainties. According to the Bank of Korea’s “Q4 2025 Deposit-Taking Institutions’ Industry-Specific Loans” report released on the 9th, the total outstanding industry-specific loans amounted to 2,026.1 trillion Korean won by the end of last year, representing an increase of 8.6 trillion won from the previous quarter. The annual increase compared to the end of 2024 was 60.7 trillion won, reflecting a 3.1% growth rate. This marked the lowest annual growth rate for industry-specific loans since 2012, when it was recorded at 2.6%.

The Bank of Korea’s “industry-specific loans” are defined as loans that do not include household debt, covering corporate and government or non-profit organization loans. Lee Hye-young, who leads the Financial Statistics Team at the Bank of Korea, stated, “The growth of industry-specific loans has slowed because of weak construction activity and reduced manufacturing investment caused by increased external uncertainties.” The rate of growth for these industry-specific loans has been decreasing for three years in a row since 2022.

Loans in the construction industry dropped by 4.4 trillion won to 99.9 trillion won on a year-over-year basis, marking the biggest decline. In just the fourth quarter, they declined by 2.9 trillion won. Manufacturing loans increased by 4.0% compared to the end of the prior year, which is less than the 5.7% growth seen in 2024. Loans in the service sector went up by 3.2%, a small rise from the 3.0% increase recorded the previous year. However, due to an AI boom led by the U.S., which boosted semiconductor sales and exports, loans for the electronic components and computer industry rose by 3.7 trillion won annually and 300 billion won in the fourth quarter. Lee Hye-young stated, “The increase in loans for semiconductor companies was mainly for facility funding.”

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