By Na Jeong-ju
Staff Reporter
South Korea's per capita debt soared to a record high of 15.27 million won ($15,600) last year, while financial assets grew at a faster pace than debts, the central bank said Thursday.
The total amount of debts individuals owe to financial institutions rose 10.4 percent year-on-year to an outstanding 739.7 trillion won as of the end of last year, slowing from an 11.4 percent rise in 2006.
Given the latest tally of the country's population at 48.4 million, per capita debt came to 15.27 million won in 2007, up from 13.87 million won in 2006, according to the Bank of Korea (BOK).
Combined financial assets held by individuals rose 12.2 percent from a year ago to 1.707 quadrillion won, as they enjoyed gains from equity investments.
Investments in stocks and bonds by individuals came to 64.5 trillion won last year, compared with 37.8 trillion won a year ago as retail investors jumped into stock investments amid a bullish market. The average share price jumped more than 30 percent in 2007 from a year ago.
``Individuals' ability to pay back debts improved last year as the ratio of their financial assets to debts rose to 2.31 from 2.27 in 2006,'' a BOK official said.
The total amount of financial assets held by firms, individuals and the government stood at 8.014 quadrillion won at the end of last year, up 15.4 percent from the previous year. It was the first time that outstanding total assets surpassed 8 quadrillion won.
The growth of individual debts slowed last year as demand for home-backed loans fell following the government's introduction of stricter lending rules, the BOK said.
``The debt growth of individuals slowed last year as people had increased difficulty in getting mortgages,'' a BOK official said.
The government took a set of measures to curb soaring housing prices in late 2006, making it more difficult for individuals to borrow home-backed loans from banks.
Household loans fell for the first time in a year in January as banks toughened lending rules for households amid a sluggish housing market and deepening concerns over a global credit squeeze.
Outstanding household loans fell 487 billion won, or 0.1 percent, from a month ago to 473.6 trillion won in January, marking the first decline since January of last year when the amount dropped by 1.2 trillion won.
The decrease in household loans in January reflected a weaker demand for home-backed loans and tougher credit rules by institutions, according to the BOK.