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Bank-extended household loans grow at slowest clip in 2 yrs in Jan.

All News 12:00 February 15, 2019

SEOUL, Feb. 15 (Yonhap) – The value of household loans extended by South Korean banks grew at the slowest pace in two years last month on fewer housing transactions, central bank data showed Friday.

The balance of bank lending given to households came to 828.7 trillion won (US$734.7 billion) as of the end of January, up 1.1 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

It marked the smallest on-month gain since January 2017 when household loans increased 100 billion won.

Mortgages rose an 11-month low of 2.6 trillion won to 610.5 trillion won last month, while non-mortgage loans, including lending through overdraft lines of credit, declined 1.5 trillion won to 217 trillion won.

The central bank said home transactions usually become sluggish in the winter season and money demand for house rents and moves decrease at the same time.

Some 2,000 apartment deals in the capital city of Seoul were clinched in January, slumping from 10,000 contracts made in the same month last year.

"It's too early to say the growth pace of household loans has already been stabilized, because the January figures showed a very strong seasonal cycle," a BOK official said.

The incumbent Moon Jae-in government, which took office in 2017, has churned out a series of anti-speculation measures intended to curb household debts and the overheated property market, including the strongest one, which was released in mid-September last year.

South Korea's total household credit, including loans from banks and other financial institutions, surpassed 1,500 trillion won in September last year amid the years-long property boom.

Bank-extended household loans grow at slowest clip in 2 yrs in Jan. - 1


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