Corporate lending growth hits 18-month low in 3rd quarter

Korean deposit-taking financial firms' corporate loans grew at the slowest annual pace in 18 months in the third quarter as the local economy lost steam, the central bank said Monday.

Corporate lending extended by banks and non-bank institutions stood at 797.3 trillion won ($735.3 billion) as of the end of September, up 11.8 trillion won from three months earlier, according to the Bank of Korea (BOK). It grew 4 percent from a year earlier.

The third-quarter growth picked up from a 9.8 trillion won on-quarter gain in the second quarter, but its annual growth pace marked the slowest gain since 3.5 percent tallied in the first quarter of 2011, the bank said.

The on-year growth pace slowed for the third straight quarter in the third quarter, indicating that banks' lending growth has eased amid the economic slowdown.

The Korean economy grew 0.2 percent on-quarter in the third quarter, slowing from a 0.3 percent gain in the previous quarter.

In the third quarter, local banks' corporate loans grew 11.8 trillion on-quarter to 637.6 trillion won while non-bank institutions' loans stayed flat at 159.7 trillion won.

By industry, lending to manufacturers rose 7.7 trillion won on-quarter to 273.5 trillion won while loans to builders inched up 100 billion won to 49.5 trillion won, the first quarterly gain in one year, it added. (Yonhap)