ID :
186203
Fri, 06/03/2011 - 06:50
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https://oananews.org//node/186203
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Korean major banks heavily increase home lending in Q1
SEOUL, June 3 (Yonhap) -- South Korea's six major banks competitively expanded household loans in the first quarter in a bid to boost assets, adding to concerns about snowballing household debt, data showed Friday.
Combined household loans extended by top lender Kookmin Bank and its five industry rivals grew by 2.5 trillion won (US$2.32 billion) in the January-March period, according to the industry data.
This accounted for about 40 percent out of the total quarterly loan growth of 6.3 trillion won extended by banks and nonbank institutions.
In the cited period, mortgage loans extended by the six lenders grew 3.7 trillion won, accounting for about 51 percent of total home-backed lending growth of 7.2 trillion won.
As of end-March, local financial institutions' home loans came in at 752.3 trillion won, out of which banks' total household lending, including mortgage loans, reached 435.1 trillion won.
Local banks, which were once hit hard by the global financial crisis, have begun to increase their assets as the local economy continues to grow. Due to cautions against soured construction loans, domestic banks are focusing more on extending loans to households.
The financial watchdog recently urged these banks to refrain from engaging in excessive competition for lending growth.
Snowballing household debt has caused headaches for Korean policymakers because rising interest rates will crimp households' capacity to service debt. Delaying a rate hike, however, could also result in further growth of their indebtedness.
Combined household loans extended by top lender Kookmin Bank and its five industry rivals grew by 2.5 trillion won (US$2.32 billion) in the January-March period, according to the industry data.
This accounted for about 40 percent out of the total quarterly loan growth of 6.3 trillion won extended by banks and nonbank institutions.
In the cited period, mortgage loans extended by the six lenders grew 3.7 trillion won, accounting for about 51 percent of total home-backed lending growth of 7.2 trillion won.
As of end-March, local financial institutions' home loans came in at 752.3 trillion won, out of which banks' total household lending, including mortgage loans, reached 435.1 trillion won.
Local banks, which were once hit hard by the global financial crisis, have begun to increase their assets as the local economy continues to grow. Due to cautions against soured construction loans, domestic banks are focusing more on extending loans to households.
The financial watchdog recently urged these banks to refrain from engaging in excessive competition for lending growth.
Snowballing household debt has caused headaches for Korean policymakers because rising interest rates will crimp households' capacity to service debt. Delaying a rate hike, however, could also result in further growth of their indebtedness.
