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(LEAD) Household debt growth slows down in January: BOK

All News 14:21 February 09, 2017

(ATTN: ADDS details in 3rd para, last 3 paras)

SEOUL, Feb. 9 (Yonhap) -- South Korean banks' household loans increased at a modest pace last month on interest rate hikes and a tepid move in the housing sector, the central bank said Thursday.

The outstanding loans extended to households here rose 100 billion won (US$87.1 million) to 708 trillion won in January, far less than the 3.4 trillion won recorded a month earlier, according to the Bank of Korea (BOK).

It represents the smallest on-month gain in three years.

Mortgage loans grew 800 billion won during the month to 533.7 trillion won, while unsecured loans based on borrowers' credit qualifications decreased by 700 billion won to 173.5 trillion won.

The central bank cited a "seasonal factor" among the reasons for the marked slowdown in household debt growth.

"The growth size of mortgage loans contracted due to less trade in the housing sector in the off-peak season and interest rate hikes," it said.

A scene of a mortgage loan service team at a Seoul bank in an undated file photo. (Yonhap)

The number of apartments traded in Seoul fell to around 5,000 in January from 9,000 in December and 11,000 in November, the BOK noted.

On the other hand, interest rates for mortgage loans from banks climbed to 3.13 percent in December from 3.04 percent in November and 2.89 percent in October.

Credit line loans, known as "minus loans," dwindled partly because corporate employees paid off some of their debts with year-end bonuses, the BOK said.

Outstanding corporate loans extended by banks increased by 9 trillion won in January to 753.9 trillion won from a month earlier.

Some conglomerates raised their borrowing again after a temporary debt payment to reduce their year-end debt ratio, said the BOK. A number of small and medium-sized firms also took more loans for value-added tax payment.

Outstanding bank deposits dropped by 20.1 trillion won last month after posting a 9-trillion won hike in December.


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