KB Kookmin Bank maintains its nationwide mortgage loan limit of 300 million won despite ongoing backlash, according to financial industry sources on the 16th. The bank implemented the reduced limit from the 10th, cutting the previous government-set limit for the Seoul metropolitan area and regulated regions from 600 million won by half. The decision stems from the bank's annual household loan management targets, as the institution aims to increase total household loans by 909.2 billion won this year while reducing mortgage loans by 417.2 billion won and increasing credit loans by 1.3264 trillion won. The move has drawn criticism from homebuyers, regulatory authorities, and politicians, with the Financial Services Commission clarifying the decision was made autonomously by the bank without prior coordination.
KB Kookmin Bank Implements 300 Million Won Nationwide Mortgage Limit
KB Kookmin Bank set the nationwide mortgage loan limit at a maximum of 300 million won effective from the 10th. The bank announced the policy on the 8th with implementation on the 10th, applying the restriction across all regions rather than limiting it to the Seoul metropolitan area and regulated zones. The application period was designated as "until separate notice," allowing for potential future adjustments.
A KB Kookmin Bank official stated, "The limit was lowered to 300 million won for the purpose of achieving a soft landing for our annual household loan management target." The official added, "As far as I know, reversal has not been considered."
Bank Cites Annual Loan Management Targets as Rationale
The bank's annual household loan increase target stands at 909.2 billion won, encompassing both mortgage loans and other loans including credit loans. The detailed breakdown shows credit loans planned to increase by 1.3264 trillion won while mortgage loans are scheduled to decrease by 417.2 billion won.
The bank explained the measure was implemented for stable household loan management. Industry observers noted that housing purchase demand remained strong due to unprecedented stock market prosperity, causing mortgage loan balances to increase rapidly. The bank's previous penalty for exceeding household loan volume targets last year also reportedly influenced the decision.
Financial Authorities Distance from Bank's Autonomous Decision
Financial Services Commission Administrative Director Shin Jin-chang clarified, "This is a matter that KB Kookmin Bank decided autonomously," emphasizing there was no prior coordination. He added, "The authorities are not reviewing or requesting identical measures from other banks."
Following the controversy, authorities sent a notice through the Korea Federation of Banks to the banking sector requesting advance reporting when changing household loan-related policies. This represented a de facto warning against unilateral actions, considering banks had previously determined household loan regulations autonomously within the framework of the authorities' total volume controls.
Industry Observers Note Shift in Regulatory Coordination
Politician Ahn Cheol-soo of the People Power Party criticized the bank, stating, "KB Kookmin Bank, which cut housing loans in half, should rather change its sign to 'JM Jae-myung Bank,'" pointing out the bank was excessively concerned with government reactions.
A financial industry official remarked, "KB Kookmin Bank probably expected praise internally, but the authorities began distancing themselves and the steps became tangled," adding, "The position has become awkward." Banks that had been considering additional mortgage restrictions adopted a wait-and-see approach following the authorities' firm stance, reducing the likelihood of balloon effects spreading across the financial sector.
FAQ
What mortgage loan limit did KB Kookmin Bank implement on the 10th?
KB Kookmin Bank implemented a nationwide mortgage loan limit of 300 million won effective from the 10th. This represented a reduction from the government-set limit of 600 million won for the Seoul metropolitan area and regulated regions.
Why did KB Kookmin Bank reduce its mortgage loan limit?
The bank reduced the limit to achieve its annual household loan management target of increasing total household loans by 909.2 billion won, which includes plans to increase credit loans by 1.3264 trillion won while decreasing mortgage loans by 417.2 billion won.
How did financial authorities respond to KB Kookmin Bank's decision?
Financial Services Commission Administrative Director Shin Jin-chang stated the decision was made autonomously by the bank without prior coordination. The authorities subsequently sent a notice through the Korea Federation of Banks requesting advance reporting of household loan policy changes.
