The Bank of Korea’s June 2026 financial market trends report showed a month marked by higher rates, equity volatility and a shift in funding flows. Treasury bond yields and major short-term market rates rose on domestic and global inflation concerns and expectations of a rate hike, although longer-dated yields later gave back part of their increase after lower oil prices followed the preliminary U.S.-Iran ceasefire agreement in mid-June. The KOSPI reached a record 9,114 on June 22 on semiconductor strength and ceasefire expectations, then corrected sharply amid uncertainty over major economy monetary policy and heavy net foreign selling. In credit and funding, bank household loans accelerated, corporate bank lending slowed, bank deposits remained strong and funds under management at asset management companies turned negative. Bank household loans increased by KRW 7.6 trillion in June, up from KRW 6.9 trillion in May, led by stronger home mortgage growth of KRW 4.3 trillion as housing transactions in the Seoul metropolitan area rose in April and May and demand increased for intermediate payments financing on pre-sold housing units. Other household loans grew by KRW 3.3 trillion, with unsecured lending supported by retail stock investment, while leasehold deposit loans continued to decline. Corporate bank lending rose by KRW 5.1 trillion, down from KRW 10.6 trillion in May, as small and medium-sized enterprise lending slowed to KRW 1.7 trillion and large corporate lending eased to KRW 3.4 trillion. Corporate bonds remained in net redemption at KRW 2.9 trillion and CP and short-term bonds also stayed in net redemption at KRW 1.7 trillion as higher rates and half-year-end balance sheet management weighed on issuance. On the funding side, bank deposits increased by KRW 28.8 trillion, with both transferable deposits and time deposits rising, while asset management company funds fell by KRW 11.7 trillion as money market funds dropped by KRW 29.3 trillion and bond funds declined by KRW 4.8 trillion.
Bank of Korea2026-07-09
Bank of Korea reports faster June household loan growth as bond yields rose and asset management inflows reversed
The Bank of Korea reported that June saw higher market rates, a record KOSPI followed by a sharp correction, and stronger household loan growth. Bank household loans rose by KRW 7.6 trillion, while corporate bank lending slowed to KRW 5.1 trillion and corporate bonds remained in net redemption. Bank deposits increased by KRW 28.8 trillion, but asset management company funds fell by KRW 11.7 trillion as MMF flows turned sharply negative.