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Growth pace of household lending slows down in Nov.

All News 12:00 December 13, 2017

SEOUL, Dec. 13 (Yonhap) -- South Korea's household lending by banks slowed down slightly last month amid the government's toughened financial measures to cool down the real estate market, central bank data showed Wednesday.

Outstanding household loans from lenders came to 762.7 trillion won (US$698.4 billion) as of the end of November, according to the data by the Bank of Korea (BOK). This marks a 6.6 trillion-won increase from a month earlier, down from a 6.9 trillion-won rise in October

Mortgages climbed 3 trillion won on-month to 567.3 trillion won in November due to a steady rise in home transactions.

The BOK said other bank loans, including lending through an overdraft line of credit, gained a record 3.7 trillion won on-month to 194.5 trillion won due to a rise in demand for loans from two Internet-only banks.

The South Korean government has intensified measures to tighten mortgage rules for owners of multiple homes as part of efforts to ensure mounting household debt does not hurt the nation's economy.

The total household credit of Asia's fourth-largest economy reached a record 1,419 trillion won in September, which economists fear could dampen consumer spending going forward and hold up growth.

In line with the move, the central bank raised the key rate by a quarter percentage point to 1.5 percent on Nov. 30 for the first time in nearly 6 1/2 years.

"The market had already priced the rate hike for months. Banks raised loan rates in advance," said a BOK official. "The BOK's rate-hike decision will hardly affect the pace of household lending in the coming months."

Growth pace of household lending slows down in Nov. - 1


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