Financial firms' household loan growth slows in July

SEOUL, Sept. 19 (Yonhap) -- Household loans extended by South Korean financial firms grew at a slower pace in July than the previous month, affected by the regulator's move to curb household debt, the central bank said Monday.
Household lending handled by local banks and non-bank institutions totaled 622.2 trillion won (US$556.3 billion) as of the end of July, up 4.4 trillion won from the previous month, according to the Bank of Korea (BOK).
The July reading compared with a 5.6 trillion won on-month gain tallied in June, it added.
An official at the BOK said the slowed growth came due to a seasonal factor as people's demand for credit loans declined because companies usually provide bonuses in July.
He added that the watchdog's move to curb growing household debt also contributed to smoothing out the growth of household loans.
In June, the government unveiled a set of measures to curb rising household debt by tightening banks' loan-to-deposit ratios and mending banks' lending practices.
Home-backed loans handled by financial firms grew at a faster clip in July than June while the growth of credit lending eased down, the BOK noted.
Banks' household loans, including home-backed lending, grew by 2.2 trillion won on-month to 446.5 trillion won as of end-July, slowing from a 3.3 trillion won gain in June, the central bank said.
Banks' mortgage lending grew 1.9 trillion won to 297.3 trillion won while their non-housing loans grew 300 billion won to 145.4 trillion won, easing from a 1.7 trillion won gain tallied in June.
The data came as South Korea is grappling with snowballing household debt, which stood at 876 trillion won as of the end of June.
The BOK froze the key interest rate at 3.25 percent for the third straight month in September on dimmer global economic outlooks.