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187377
Thu, 06/09/2011 - 07:41
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https://oananews.org//node/187377
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Banks' household loans surge in May
SEOUL (Yonhap) - South Korean banks' household loans grew by the largest amount in six months in May as the economic recovery and still-low borrowing costs spurred loan demand, the central bank said Thursday.
Local banks' home loans, including home-backed lending, reached 439.8 trillion won (US$405.9 billion) as of the end of May, up 3.3 trillion won from the previous month, according to the Bank of Korea (BOK).
The May number rose from a 2.5 trillion won on-month gain the previous month and marked the largest monthly expansion since a 4.1 trillion won gain tallied in November 2010.
"Household and corporate loans have been on the rise as some local banks are seen as competitively expanding their assets," said Kim Hyun-kee, a senior economist at the BOK.
Banks' mortgage lending grew by 1.4 trillion won on-month to 293.7 trillion won as of end-May. But if the sale of mortgage loans by banks to the state-run Korea Housing Finance Corp. is taken into account, home-backed loans expanded by 2.5 trillion won in May.
Kim said it is too early to say that re-tightened rules on mortgage lending were effective in smoothing the growth of mortgage loans, but more than 2 trillion won monthly growth in home-backed lending seems to be large enough to warrant close monitoring.
In March, the government re-tightened eased rules on mortgage lending in a bid to curb excessive growth of household debt. In August 2010, the government temporarily eased its grip on home-backed loans to bolster the tepid housing market.
Snowballing household debt has caused headaches for Korean policymakers because rising interest rates crimp households' capacity to service debt.
Meanwhile, South Korean banks' corporate lending grew at a slower pace in May compared with the previous month, the BOK said.
Corporate loans by local banks reached an outstanding 543.1 trillion won as of end-May, up 4.4 trillion won from the previous month.
Bank lending to large firms increased by 3 trillion won on-month to 101.8 trillion won while lending to smaller companies grew by 1.3 trillion won to 441.2 trillion won.
The data came one day before the BOK holds its monthly rate-review meeting amid lingering economic uncertainty.
Analysts said the BOK may freeze the key interest rate at 3 percent for the third straight month in June.
The bank has raised the borrowing cost by a combined 1 percentage point four times since July last year in an effort to normalize the accommodative stance.
Local banks' home loans, including home-backed lending, reached 439.8 trillion won (US$405.9 billion) as of the end of May, up 3.3 trillion won from the previous month, according to the Bank of Korea (BOK).
The May number rose from a 2.5 trillion won on-month gain the previous month and marked the largest monthly expansion since a 4.1 trillion won gain tallied in November 2010.
"Household and corporate loans have been on the rise as some local banks are seen as competitively expanding their assets," said Kim Hyun-kee, a senior economist at the BOK.
Banks' mortgage lending grew by 1.4 trillion won on-month to 293.7 trillion won as of end-May. But if the sale of mortgage loans by banks to the state-run Korea Housing Finance Corp. is taken into account, home-backed loans expanded by 2.5 trillion won in May.
Kim said it is too early to say that re-tightened rules on mortgage lending were effective in smoothing the growth of mortgage loans, but more than 2 trillion won monthly growth in home-backed lending seems to be large enough to warrant close monitoring.
In March, the government re-tightened eased rules on mortgage lending in a bid to curb excessive growth of household debt. In August 2010, the government temporarily eased its grip on home-backed loans to bolster the tepid housing market.
Snowballing household debt has caused headaches for Korean policymakers because rising interest rates crimp households' capacity to service debt.
Meanwhile, South Korean banks' corporate lending grew at a slower pace in May compared with the previous month, the BOK said.
Corporate loans by local banks reached an outstanding 543.1 trillion won as of end-May, up 4.4 trillion won from the previous month.
Bank lending to large firms increased by 3 trillion won on-month to 101.8 trillion won while lending to smaller companies grew by 1.3 trillion won to 441.2 trillion won.
The data came one day before the BOK holds its monthly rate-review meeting amid lingering economic uncertainty.
Analysts said the BOK may freeze the key interest rate at 3 percent for the third straight month in June.
The bank has raised the borrowing cost by a combined 1 percentage point four times since July last year in an effort to normalize the accommodative stance.
