S. Korean household loans grow most in 5 months in May

(ATTN: CORRECTS time period in headline, 1st para)
By Park Bo-ram
SEOUL, July 15 (Yonhap) -- South Korean lenders' household loans grew at the
fastest clip in five months in May as mortgage lending rose sharply, the central
bank said Wednesday.
Outstanding household loans extended by banks and nonbank financial institutions
reached 523 trillion won (US$414.8 billion) as of the end of May, up 3.2 trillion
won from a month earlier, the Bank of Korea (BOK) said in a statement.
The monthly gain is the largest since a 3.2 trillion won gain in December 2008,
according to the BOK. It also marks the fourth consecutive monthly expansion
since February.
Commercial banks' household loans grew by 2.9 trillion won to 396.3 trillion won
with lending by non-banking financial firms, including mutual savings banks,
rising by 304.6 billion won to 126.7 trillion won.
"The sharp loan growth is attributable to rising demand for home-backed loans," a
BOK official said.
Local banks' mortgage loans stood at 250.9 trillion won in May, up 2.4 trillion
won from the previous year, fueled by record-low interest rates and reviving
asset prices, the central bank said.
On July 7, the Financial Supervisory Service toughened regulations on mortgage
loans on concerns that ample liquidity may trigger asset bubbles after the BOK
left its key interest rate unchanged at an all-time low of 2 percent for July.
The central bank cut a total of 3.25 percentage points between October-February
to stimulate the sluggish economy.
pbr@yna.co.kr
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