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| ▲ This photo, taken Oct. 3, 2021, shows signs about a bank's loan programs that were put up on the exterior of a lender in Seoul. South Korea's financial regulator is reviewing further tightening rules on household loans in a bid to curb the fast growth of household debt. (Yonhap) |
banks-household loans
Banks' household loans down in Sept. amid rising lending rates
SEOUL, Oct. 13 (Yonhap) -- Household loans extended by banks in South Korea dropped in September amid the fast-rising lending rates in line with the central bank's inflation-fighting interest rate hikes, data showed Thursday.
Banks' outstanding household loans came to 1,059.5 trillion won (US$743.7 billion) as of end-September, down 1.2 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).
This followed a 300 billion-won on-month increase tallied in August.
September's downturn came as bank's lending rates are on the rise in tandem with the BOK's sharp policy rate hikes aimed at bringing soaring inflation down.
The BOK has hiked its benchmark rate eight times since August last year by a combined 2.5 percentage points. They included two big-step 50 basis-point increases in July and this week.
Banks' home-backed loans grew 900 billion won on-month to 793.5 trillion won as of end-September but the pace of growth slowed from the previous month's 1.6 trillion-won rise.
Banks' unsecured and other types of loans also declined 2.1 trillion won to 264.7 trillion won.
Meanwhile, banks' corporate lending continued to rise as small firms needed operation funds and large businesses preferred bank loans to bond issuance amid freezing fixed-income markets.
Banks' corporate loans stood at 1,155.5 trillion won as of end-September, up 9.4 trillion won from a month earlier, the BOK data showed.
This marked the largest September increase since June 2009, when related data started to be compiled.
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