Household borrowing rises sharply in April on increased home transactions

SEOUL, May 14 (Yonhap) -- Household loans extended by South Korean banks rose markedly in April, central bank data showed Wednesday, driven by a rise in housing transactions following state deregulatory measures.

Banks' outstanding household loans stood at 1,150.1 trillion won (US$813.65 billion) as of end-April, up 4.8 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

It marked the third consecutive monthly increase and a sharp acceleration from the 1.6 trillion-won increase seen in March.

"Home transactions increased markedly in February and March, and their impact on loans had materialized in the following months," BOK official Park Min-cheol said.

According to the data from the land ministry, apartment transactions nationwide jumped to 50,000 cases in March from 26,000 in January and 38,000 in February. The data for April is yet to be available.

In Seoul, the number of apartment contracts rose from 3,300 in January to 6,200 in February and further to 9,300 in March.

The increase in housing transactions followed the loosening of regulations on household lending by banks earlier this year.

In addition, the Seoul municipal government eased the so-called land transaction permission scheme, requiring prior approval from local authorities for any apartment transactions, in parts of the city's wealthy districts in mid-February. But it was reinstated just a month later after a sharp rise in real estate prices in those areas.

Home-backed loans rose by 3.7 trillion won in April from the previous month, reaching 913.9 trillion won as of end-April. The growth marked an acceleration from a 2.5 trillion-won increase logged in March.

Unsecured and other types of household loans also increased, climbing 1 trillion won to 235.3 trillion won.

Corporate loans rose sharply, as the government ramped up financial support for businesses amid growing concerns over the United States' sweeping tariff measures.

Loans to companies jumped by 14.4 trillion won in April, reversing a 2.1 trillion-won on-month decline in March.

Outstanding corporate loans stood at 1,338.7 trillion won as of end-April, the BOK said.

graceoh@yna.co.kr
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