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Household loans grow by most in 5 months in May
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Household loans extended by South Korean financial firms grew by the largest
amount in five months in May, the central bank said Friday, underscoring
concerns about snowballing household debt.
Household lending handled by local banks and non-bank institutions totaled an outstanding 612.3 trillion won (US$579.3 billion) as of the end of May, up 5.4 trillion won from the previous month, according to the Bank of Korea (BOK).
The May reading compared with a 4.6 trillion won expansion tallied in April and marked the steepest monthly increase since a 5.7 trillion won advance in December.
The central bank said the increase came mainly because people took out non-housing loans to cover spending for holidays like Children's Day.
Home-backed loans handled by financial firms grew at a slower pace in May than in April, affected by the re-tightened rules on mortgage lending.
In March, the government re-tightened eased rules on mortgage lending in a bid to curb excessive growth of household debt. In August 2010, the government temporarily eased its grips on home-backed loans to bolster the tepid housing market.
Banks' household loans, including home-backed lending, grew by 3.3 trillion won on-month to 440.9 trillion won as of end-May, the largest growth since 4.1 trillion won in November, the central bank said.
Banks' mortgage lending rose 1.4 trillion won on-month to 293.6 trillion won, slowing from a 2.3 trillion won gain in April.
The data came as South Korea is grappling with snowballing household debt, which surpassed the 800 trillion won mark.
The BOK froze the key interest rate at 3.25 percent on Thursday after raising it in June, in the face of heightened economic uncertainty like the eurozone debt crisis.
Date
2011.07.15
Household lending handled by local banks and non-bank institutions totaled an outstanding 612.3 trillion won (US$579.3 billion) as of the end of May, up 5.4 trillion won from the previous month, according to the Bank of Korea (BOK).
The May reading compared with a 4.6 trillion won expansion tallied in April and marked the steepest monthly increase since a 5.7 trillion won advance in December.
The central bank said the increase came mainly because people took out non-housing loans to cover spending for holidays like Children's Day.
Home-backed loans handled by financial firms grew at a slower pace in May than in April, affected by the re-tightened rules on mortgage lending.
In March, the government re-tightened eased rules on mortgage lending in a bid to curb excessive growth of household debt. In August 2010, the government temporarily eased its grips on home-backed loans to bolster the tepid housing market.
Banks' household loans, including home-backed lending, grew by 3.3 trillion won on-month to 440.9 trillion won as of end-May, the largest growth since 4.1 trillion won in November, the central bank said.
Banks' mortgage lending rose 1.4 trillion won on-month to 293.6 trillion won, slowing from a 2.3 trillion won gain in April.
The data came as South Korea is grappling with snowballing household debt, which surpassed the 800 trillion won mark.
The BOK froze the key interest rate at 3.25 percent on Thursday after raising it in June, in the face of heightened economic uncertainty like the eurozone debt crisis.
Source: Yonhap News (July 15, 2011)