Growth of bank household loans accelerates this year

SEOUL, May 26 (Yonhap) -- South Korean banks' lending to households grew at a far faster pace in the first four months of this year from a year ago on increased home-backed loans, the financial watchdog said Thursday.
Eighteen local banks' household loans grew by 6.3 trillion won (US$5.7 billion) during the January-April period from end-2010, compared with a 2.4 trillion won rise during the same period a year earlier, according to the Financial Supervisory Service (FSS).
Household lending reached an outstanding 433.9 trillion won as of the end of April, the watchdog said.
The accelerating growth is mainly driven by a rise in home-backed loans, the FSS noted.
The lenders' loans to companies also grew by 24.3 trillion won during the four month period to an outstanding 565.1 trillion won as of end-April, compared with an increase of 9.7 trillion won a year earlier, it said.
Meanwhile, the banks' deposits expanded by 11.4 trillion won during the period to an outstanding 1,171.7 trillion won as of end-April, compared with a gain of 13.8 trillion won a year earlier.
The growth came mainly as depositors shifted to commercial banks away from the savings bank sector suffering under massive loan defaults and bank-run fears, the regulator said.
The regulator added the average loan-deposit ratio of 15 local banks stood at 96.5 percent as of the end of March, down from 98.2 percent three months earlier.
In late 2009, the regulator required the lenders to keep the ratio below 100 percent.