South Korean Household Loans Soar for Fourth Straight Month
(MENAFN) Household borrowing from South Korean banks rose for the fourth consecutive month, driven by a robust appetite for mortgage loans, according to fresh data released Wednesday by the Bank of Korea (BOK).
By the end of May, household debt owed to deposit-taking banks reached 1,155.3 trillion won (approximately 841.1 billion U.S. dollars), marking a 5.2 trillion won (3.8 billion dollars) increase compared to April.
The growth in household lending has persisted since February, fueled by a rebound in housing transactions that has spurred higher demand for home-secured loans.
Mortgage lending surged by 4.2 trillion won (3.1 billion dollars) last month alone, while other forms of household credit—including personal loans, credit lines, and commercial real estate-backed loans—added 1.0 trillion won (728.1 million dollars).
Signs of recovery are evident in the housing market, with nationwide apartment sales rising sharply from 26,000 in January to 50,000 in March, before settling at 41,000 in April.
The BOK has trimmed its benchmark interest rate by 25 basis points twice this year—in February and May—bringing the rate to 2.50 percent. This follows earlier cuts of the same size in October and November last year.
Meanwhile, corporate lending climbed to 1,346.6 trillion won (980.4 billion dollars) at May’s close, up 8.0 trillion won (5.8 billion dollars) month-on-month.
Loans to large corporations rose by 5.4 trillion won (3.9 billion dollars), while credit extended to small businesses grew by 2.6 trillion won (1.9 billion dollars) during the same period.
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