Banks' household loans up for 4th month in July on mortgage gain
A person walks past a sign displaying information about a bank's household loan program in Seoul, July 28. Yonhap.
Household loans extended by banks in Korea rose for the fourth consecutive month in July, led by a rise in mortgage loan growth, central bank data showed Monday, amid an extended restrictive monetary policy mode.
Banks' outstanding household loans had come to 1,120.8 trillion won ($818 billion) as of end-July, up 5.5 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).
The July gain slowed from the previous month's 5.9 trillion won advance, the data showed.
Banks' home-backed loans rose 5.6 trillion won to 882.5 trillion won last month, decelerating from a 6.2 trillion-won on-month gain the previous month, while unsecured and other types of loans fell 0.1 trillion won to 237.3 trillion won over the cited period, according to the data.
Policymakers remained worried over a spike in household debts, which could sap further private spending.
Borrowing costs in Asia's fourth-largest economy remain high following the BOK's aggressive monetary tightening aimed at bringing surging inflation under control.
Last month, the central bank held its key interest rate steady at 3.5 percent for the 12th straight time amid moderating inflation and high household debt.
The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January.
The BOK chief has said the trend of slowing inflation is in place, and conditions have ripened for a monetary policy reversal at the appropriate time, while warning that market expectations over a potential rate cut seem to be somewhat excessive.
Banks' loans to companies also rose 7.8 trillion won last month, following the previous month's 5.3 trillion-won rise, the data showed.
Meanwhile, household loans extended by all financial institutions, including savings banks and insurance firms, gained 5.3 trillion won in July, accelerating from a 4.2 trillion-won increase the previous month, according to data from the Financial Services Commission.
Home-backed loans added 5.4 trillion won, slowing from a 6 trillion-won on-month increase in June, while other types of loans dipped by about 200 billion won, also slowing from a 1.8 trillion-won decline from a month before, the data showed. (Yonhap)