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The volume of credit line loans (credit limit loans) used by major commercial banks has risen to its highest point in 3 years and 8 months since the pandemic.

As of the 25th, the total amount of personal credit line loans held by the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—stood at 43.3363 trillion Korean won, according to the banking sector. This marks the highest level since the end of October 2022 (43.6609 trillion Korean won).

The credit line loans at the five largest banks have been rising by trillions of won for two straight months starting from May. It went up by 1.865 trillion won, moving from 39.6675 trillion won at the end of April to 41.5324 trillion won at the end of May, and then increased further by 1.8039 trillion won in June.

The rise in credit line loan balances in May marked the highest increase in 5 years and 1 month, since April 2021 (+6.4388 trillion Korean won), with June also experiencing a comparable growth. This is due to a surge in debt-driven investments utilizing credit line loans as the KOSPI dropped almost 10% last week and then recovered by more than 5%, reflecting significant fluctuations.

The overall amount of personal credit loans, including those with credit lines, stood at 108.7272 trillion Korean won as of the 25th, marking the highest point in three years since June 2023 (108.9289 trillion Korean won). The rise in personal credit loans in June (2.2118 trillion Korean won) was the biggest in 5 years and 2 months since April 2021 (6.8401 trillion Korean won).

The percentage of credit line loans utilized, which reflects the actual amount used relative to the available credit limit, averaged 44.8% at the five largest banks as of the 25th. As of the 25th, the total maximum credit limit for credit line loans at the five major banks amounted to 96.7469 trillion South Korean won, with 43.1363 trillion South Korean won actually drawn down as loans.

A representative from a commercial bank stated, “With the rise in stock market fluctuations, there has been an increase in the use of pre-approved credit line loans,” and mentioned, “Due to the significant surge in credit loans, we anticipate the usage rate will continue to grow for the foreseeable future.”

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