South Korean Banks Post Surge in Household Lending
(MENAFN) South Korean banks experienced a continued surge in household lending for the seventh consecutive month, fueled by robust demand for mortgage loans, according to data released by the Bank of Korea (BOK) on Wednesday.
At the end of August, the total debt owed by households to deposit-taking banks reached 1,168.3 trillion won (approximately 842.6 billion U.S. dollars), marking an increase of 4.1 trillion won compared to the previous month. This upward trend has been in place since February, with the latest rise outpacing July's increase of 2.7 trillion won.
Mortgage loans were the primary driver, growing by 3.9 trillion won, while other household loans, such as credit loans, credit lines, and commercial real estate-backed loans, added 300 billion won.
Meanwhile, signs of recovery have emerged in South Korea’s real estate market. The volume of apartment transactions nationwide saw a notable rise, with 45,000 units sold in May, 53,000 in June, and 34,000 in July.
Earlier this year, the BOK cut its benchmark interest rate by 25 basis points in both February and May, bringing it down to 2.50%. This followed similar rate reductions in October and November of the previous year.
In the corporate lending sector, total loans extended to businesses reached 1,354.8 trillion won by the end of August, reflecting a rise of 8.4 trillion won from the month prior. Loans to large corporations grew by 3.8 trillion won, while lending to small businesses saw an increase of 4.5 trillion won.
(1 won equals 0.00072 U.S. dollars)
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