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Local banks expected to limit household loan growth to just one percent this year

Published: 12 Apr. 2026, 12:20

Apartment complexes in Seoul as seen from the Lotte Tower in Songpa District, southern Seoul [NEWS1]

Major lenders in Korea are expected to limit the growth in their household loans to 1 percent this year, industry sources said Sunday, sharply lower than their initial target of around 2 percent and also lower than the 1.5 percent previously suggested by authorities.

KB Kookmin, Woori, Hana, Shinhan and NH Nonghyup are expected to set average growth targets of around 1 percent, which would translate to a combined increase of roughly 6.45 trillion won ($4.34 billion) in household lending this year, according to the banks.

One of the five banks has set a tentative goal of keeping annual household loan growth, excluding policy loans, at 0.7 percent this year after recent consultations with financial authorities, according to a source at the bank.

The move comes even after the bank met its household lending growth target last year, which would normally allow it to keep its household loan growth at a similar rate, the source noted.

“Authorities recently proposed a 1.5 percent target for overall household loan growth across the banking sector, but individual banks are expected to set lower internal targets,” said a source from another bank.

The government's push to limit household loan growth comes as part of an effort to curb rising home prices.

Under a comprehensive policy package announced in October of last year, the government designated 21 additional districts in Seoul as speculative zones, bringing all 25 districts in the capital under stricter regulations for real estate transactions.

It also tightened lending rules, lowering the cap on mortgage loans to as little as 200 million won, down from the 600 million-won limit set last June.

Yonhap