Bank loans to smaller firms jump in July

SEOUL, Aug. 9 (Yonhap) -- South Korea's bank lending to small and medium enterprises (SMEs) surged in July amid a regulatory move to tighten home-backed loans, industry data showed Tuesday.
Industry leader Kookmin Bank and four other major lenders had 303.2 trillion won (US$280 billion) in outstanding loans to SMEs as of end-July, up 2.9 trillion won from the previous month, which marks the biggest monthly gain in 27 months, according to the data.
The sharp rise came as the country's financial watchdog called on banks in June to refrain from expanding home-backed loans in a bid to curb household debt, prompting lenders to extend money to smaller firms, market watchers said.
Household debt topped 800 trillion won as of end-March, sparking concern that it could be a drag on domestic consumption.
According to the data, bank mortgages grew by 910 billion won last month, down sharply from the 1.6 trillion won increase in June.
As lenders rushed to lend money to corporate borrowers, their outstanding loans to large companies stood at 59.1 trillion won as the end of July, up 1.02 trillion won from the previous month.
As of end-July, the five banks had 675.2 trillion won in outstanding local-currency loans, up 5.4 trillion won from the previous month. Their deposits totaled 746.6 trillion won, up 3.6 trillion won, according to the data.