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Large companies' debt owed to savings banks exceeds 1 tln won

All News 10:56 April 10, 2016

SEOUL, April 10 (Yonhap) -- Debt owed by large businesses in South Korea to savings banks exceeded 1 trillion won last year apparently due to toughened loan regulations pushing them to resort to currency carrying higher interest rates, data showed Sunday.

According to the data by the Bank of Korea, the country's central bank, the outstanding borrowing by large conglomerates from savings banks stood at 1.11 trillion won (US$962 million) as of end-2015.

The amount, which has been on the steady rise in recent years, is up 46.4 percent compared with the 759.8 billion won tallied at the end of 2013.

Toughened loan-related regulations and the protracted economic slump prompted large companies to turn to the higher rate-carrying money available at savings banks, experts say.

Of the total loans made by savings banks, 5.2 percent went to large companies, which was higher than 3.9 percent in 2013 and 4.8 percent in 2014, respectively, the data showed.

The ratio continued to grow this year. As of end-January, it went slightly up to 5.4 percent.

Meanwhile, the outstanding loans made to small and medium-sized companies by saving banks here totaled 20.25 trillion won at the end of last year, according to the data.

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