A total of 235 employees at South Korea's five largest commercial banks took out home purchase loans exceeding 600 million won after the government capped mortgage lending at that level under its June 27 housing measures. Most of the loans were signed or applied for before the rules took effect and were therefore governed by the previous regulations.
Data submitted by the Financial Supervisory Service to the office of Rep. Min Byoung-dug of the Democratic Party of Korea showed that 235 people received loans of more than 600 million won among the home purchase loans extended to employees at Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and Nonghyup Bank since June 27 last year. The combined balance came to 161.5 billion won, or 27.9% of the total outstanding home loans held by employees at the five banks.
The Financial Services Commission announced measures to tighten household debt management on June 27 last year and, beginning the following day, capped mortgage loans for home purchases in the Seoul metropolitan area and other regulated zones at 600 million won. Factoring in loan-to-value and debt service ratio rules, the amount actually available falls further below that ceiling.
Shinhan Bank accounted for by far the largest number at 168, more than five times the 30 at Kookmin Bank, the second-highest. Woori Bank followed with 16, Hana Bank with 11 and Nonghyup Bank with 10.
Shinhan Bank also had the largest loan balance at 112.89 billion won, followed by Kookmin Bank at 21.82 billion won, Woori Bank at 10.93 billion won, Hana Bank at 8.49 billion won and Nonghyup Bank at 7.35 billion won.
Another 89 employees borrowed 700 million won or more. Shinhan Bank again had the most at 56, followed by Kookmin with 15, Hana with eight, and Woori and Nonghyup with five each. Their combined loan balance totaled 74.62 billion won.
The banks say most of the loans were extended properly under the earlier standards. Borrowers who signed a purchase contract or applied for a loan before the June 27 measures took effect remain subject to the previous rules, they said. Shinhan Bank said 47 of its 56 loans of 700 million won or more fell under the previous regulations.
"Setting aside whether individual loans were unlawful, financial authorities need to verify on what basis the previous rules and exceptions were applied, and whether the same standards were applied to ordinary citizens and to bank employees," Min said.