Local banks' corporate loan growth picks up in April

SEOUL, May 11 (Yonhap) -- South Korean banks expanded their corporate lending in
April mainly because government credit guarantees helped smaller companies borrow
more, the central bank said Monday.

As of the end of April, outstanding bank loans to companies amounted to 472.4
trillion won (US$381.3 billion), up 3.22 trillion won from a month earlier, the
Bank of Korea (BOK) said. The April data compared with a 2.1 trillion won
on-month advance in March.
"Bank loans to smaller companies picked up, backed by loan guarantees by
state-run agencies," the BOK said. "But lending to large firms remained almost
flat as they tapped corporate debt markets."
Local banks' loans to small and medium enterprises rose by 3.2 trillion won to
412.3 trillion won, while those to larger companies expanded by a mere 19.1
billion won to 60.1 trillion won, the central bank added.
Korean lenders have become wary of extending loans to smaller firms due to
concerns over their financial soundness, as problem loans pile up amid the
slumping economy and a corporate restructuring drive. The government, however,
has called on banks to free up credit in an effort to revive the economy.
The data comes a day before the BOK makes its monthly interest-rate decision. The
central bank is widely forecast to freeze the benchmark seven-day repo rate at a
record low of 2 percent for the third straight month.
The BOK had made six consecutive rate cuts totaling 3.25 percentage points until
February in a bid to bolster the slowing economy.
sooyeon@yna.co.kr
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