An aerial view of the DIH Bangbae apartment complex in Bangbae-dong, Seocho-gu, Seoul. [Hyundai E&C]
An aerial view of the DIH Bangbae apartment complex in Bangbae-dong, Seocho-gu, Seoul. [Hyundai E&C]

Major commercial banks have launched an all-out competition to secure balance-payment loans for the DIH Bangbae apartment complex in Seocho-gu, Seoul, ahead of its move-in date next month. The push marks a revival of lending competition that had been largely frozen, driven by financial regulators' decision to ease household loan growth caps and exempt real-demand group loans from individual bank management targets.

According to financial industry sources Friday, the five major banks — KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH NongHyup Bank — all raised their balance-payment loan limits for DIH Bangbae. Each bank's cap, which had stood at 100 billion won ($71.8 million) through Thursday, was raised to between 200 billion and 400 billion won.

By institution, Shinhan Bank received the highest allocation at 400 billion won, followed by Hana Bank at 350 billion won, KB Kookmin Bank and NH NongHyup Bank at 300 billion won each, and Woori Bank at 200 billion won. Further increases remain possible depending on borrower demand. Combined, the five banks' balance-payment loan capacity jumped more than threefold in a single day — from 500 billion won to 1.55 trillion won.

A parallel race to cut interest rates is intensifying as banks compete for borrowers. Shinhan Bank added a new benchmark — the new Cofix rate plus 1.5 percentage points, yielding an annual rate of 4.68 percent — alongside its existing financial bond six-month rate plus 1.4 percentage points (4.74 percent annually), effectively trimming its lending rate by 0.06 percentage points. NH NongHyup Bank also lowered its new Cofix spread from 1.6 percentage points to 1.5 percentage points, matching the 4.68 percent annual rate. KB Kookmin Bank and Woori Bank had earlier cut their spreads to 1.5 percentage points as well, joining the 4.68 percent tier.

Hana Bank is offering annual rates of 4.766 percent on a six-month financial bond basis and 5.400 percent on a five-year basis. Borrowers eligible for its multi-child preferential rate discount of 0.1 to 0.2 percentage points could see their rate fall as low as 4.566 percent annually.

The combination of expanded loan limits and falling rates is creating a borrower-friendly environment rarely seen in the market recently. Banks view the balance-payment loans as a decisive opportunity to lock in high-quality assets early, citing the strong income profiles of prospective residents and the solid collateral value of the units.

Meanwhile, financial regulators this year raised the annual household loan growth target from 1.5 percent to 3.0 percent and decided to exclude housing-related group loans — including relocation, interim-payment and balance-payment loans — from individual banks' management targets.


hwshin@heraldcorp.com