▲ This file photo, taken July 18, 2023, shows information about a bank's loan programs in Seoul. (Yonhap)

household loans-November tally

Banks' household loans up for 8th month in November amid high rates

SEOUL, Dec. 13 (Yonhap) -- Household loans extended by banks in South Korea rose for the eighth straight month in November, led by rising home-backed loans, central bank data showed Wednesday, amid worries that highly indebted households could pose a risk to Asia's fourth-largest economy amid high borrowing costs.

Banks' outstanding household loans had come to 1,091.9 trillion won (US$831.6 billion) as of end-November, up 5.4 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

The November gain decelerated from a 6.7 trillion rise the previous month, but marks an on-month rise for eight months in a row, the data showed.

Banks' home-backed loans rose 5.8 trillion won to 845.3 trillion won last month, accelerating from a 5.7 trillion won on-month gain the previous month, while unsecured and other types of loans fell 0.3 trillion won to 245.4 trillion won over the cited period, according to the data.

In the first 11 months of the year, banks' household loans surged 33.9 trillion won, a sharp turnaround from a decline of 2.9 trillion won during the same period of last year, according to the data.

Policymakers remained worried over a spike in household debts, which could sap further private spending amid a weak economic recovery.

Borrowing costs in Asia's fourth-largest economy remain high following the BOK's aggressive monetary tightening aimed at bringing surging inflation under control.

Last month, South Korea's central bank held its key interest rate steady at 3.5 percent for the seventh straight time amid a slowdown in growth and moderating inflation.

This marked the seventh straight time that the BOK has stood pat following rate freezes in February, April, May, July and August. The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.

Last year, outstanding household loans slipped for the first time in 18 years amid higher rates.

Banks' loans to companies also continued to rise amid high demand.

Corporate loans extended by banks rose 7.3 trillion won last month, slowing from an 8.1 trillion won rise the previous month, the data showed.

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