The Bank of Korea published its July 2026 financial market trends, showing that bank household loan growth slowed to KRW 5.4 trillion from KRW 7.6 trillion in June, while corporate lending accelerated to KRW 7.7 trillion from KRW 5.1 trillion. Mortgage and other household loan growth both moderated, while lending increased to large corporations and small and medium-sized enterprises. Corporate bonds remained in net redemption, although commercial paper and short-term bonds returned to net issuance. Bank deposits fell by KRW 30 trillion, reversing a KRW 28.8 trillion increase in June, as transferable deposits declined sharply because of seasonal corporate withdrawals and shifts into time deposits. Assets under management contracted by KRW 42.8 trillion, driven by declines in stock-type and other funds linked to lower equity prices, despite inflows excluding valuation effects. Treasury yields rose sharply following stronger domestic growth, the Base Rate increase and expectations of further tightening before paring gains, while the KOSPI corrected amid concerns about the artificial intelligence industry, Middle East uncertainty and continued foreign investor selling.
Bank of Korea2026-08-14
Bank of Korea reports slower household loan growth, stronger corporate lending and sharp deposit outflows in July
The Bank of Korea reported that household loan growth slowed to KRW 5.4 trillion in July, while corporate lending accelerated to KRW 7.7 trillion. Bank deposits fell by KRW 30 trillion and assets under management contracted by KRW 42.8 trillion. Treasury yields rose before paring gains, and the KOSPI underwent a substantial correction.