Seoul: Household loans newly extended by the country's four major banks have exceeded their annual growth targets by more than 30 percent, according to industry sources Sunday, raising concerns about a potential lending freeze before year-end. The nation's top four lenders -- KB Kookmin, Shinhan, Hana, and Woori -- reported household loan growth of 7.89 trillion won (US$5.36 billion) this year, excluding policy loans, as of Friday. The amount is 32.7 percent higher than their combined growth target of 5.95 trillion won submitted to financial authorities earlier this year.

According to Yonhap News Agency, in June, the Financial Services Commission asked all local banks to reduce their aggregate household loan growth targets to 50 percent of their original levels. In response, the banks submitted revised and lower targets. Despite the adjustments, all four major banks have already surpassed their individual targets, with the rate ranging from 9.3 percent to 59.5 percent.

Expanding the scope to the five largest banks, only NH Nonghyup remains below its target, reporting 1.8 trillion won in household loan growth, compared with a 2.12 trillion-won target. As a result, banks have begun emergency measures to restrict lending. On Saturday, KB Kookmin Bank blocked new applications for home purchase mortgage loans, while Hana Bank plans to limit new applications for both mortgage and "jeonse" loans starting Tuesday. Shinhan Bank and Woori Bank are also expected to follow suit soon.

Despite tighter lending rules, the total balance of household loans from the five major banks reached 769.27 trillion won as of Friday, rising by 2.65 trillion won this month alone.