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Overdraft borrowing jumps after U.S.-Iran conflict as investors rush to buy stocks

Published: 08 Mar. 2026, 20:28

ATMs are seen in Seoul on March 8. [YONHAP]

Personal overdraft borrowing at major Korean banks increased by about 1.3 trillion won ($875 million) in March as investors hurriedly borrowed money to buy stocks after a market drop triggered by military clashes between the United States and Iran that erupted on Feb. 28.

The balance of personal overdraft accounts at the five major banks — KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH NongHyup Bank — reached 40.72 trillion won as of Thursday, according to financial sources on Sunday.

The figure reflects the amount customers actually borrowed rather than their approved credit limits. The total climbed by 1.3 trillion won, or about 3.3 percent, in just three business days from 39.42 trillion won on Feb. 27, reaching its highest level since December 2022, when the balance stood at 42.05 trillion won.

Balances in overdraft accounts at commercial banks generally declined after reaching a record 52.9 trillion won in April 2021 during a period of ultralow interest rates and a housing boom following the Covid-19 pandemic.

Tighter household lending rules kept the total in the 30 trillion won range from February 2023. The figure rose again in November 2025 to 40.08 trillion won as stricter mortgage rules pushed borrowers toward other loans and strong stock markets encouraged more people to invest.

“Overdraft balances dropped back to the 30 trillion won range at the end of last year and the beginning of this year because of bonus payments and other factors,” a banking industry official said. “Recently the balance rose sharply as investors borrowed money to buy stocks at lower prices after the Iran war.”

Money also appears to have moved from bank deposits into the stock market this month.

Time deposits at the five major banks totaled 944.1 trillion won as of Thursday, down 2.79 trillion won from the end of last month. Demand deposits — often used as cash waiting to be invested — also fell by 8.6 trillion won over the same period.

Experts warn that investors should avoid taking excessive risks by borrowing money to invest.

“More than 50 percent of household loans in Korea carry variable interest rates,” a financial industry official said. “Investors who used leverage during a rising market could face a double burden of interest payments and losses if the stock market stagnates or declines.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM SEON-MI [[email protected]]