Banks' household loan growth slows for 2nd straight month
Summary
Banks’ household loans grew at the slowest pace in four months in August, with mortgage lending still rising in South Korea. Outstanding household loans by banks increased by 3.4 trillion won to 1,198 trillion won, while other household loans fell. A Bank of Korea official said higher housing transactions in the greater Seoul area and homes becoming available for occupancy in July and August boosted mortgage demand. The official also said the impact of real estate policies announced in August should be watched closely.
Key Facts
- Outstanding household loans extended by banks stood at 1,198 trillion won, up 3.4 trillion won from a month earlier.
- The monthly increase was the smallest since April, when household loans rose by 2.1 trillion won.
- Outstanding mortgage loans rose by 4 trillion won on-month in August to 952.5 trillion won.
- Other household loans fell by 600 billion won to 244.9 trillion won.
- The Bank of Korea official linked the decline in other loans to reduced retail stock investment and tighter lending controls by local banks.
A view of apartment complexes in Seoul seen from 63 Sky Picnic, Aug. 30 / Yonhap
Household loans extended by banks grew at the slowest pace in four months, central bank data showed Wednesday, although mortgage lending appeared to be accelerating.
Outstanding household loans extended by banks stood at 1,198 trillion won ($893 billion) last month, up 3.4 trillion won from a month earlier, according to data from the Bank of Korea (BOK).
It marked the smallest monthly increase since April, when such loans rose by 2.1 trillion won.
Outstanding mortgage loans increased by 4 trillion won on-month in August to 952.5 trillion won.
Other household loans, in contrast, fell by 600 billion won to 244.9 trillion won.
"An increase in housing transactions in the greater Seoul area in May and homes becoming available for occupancy in July and August boosted demand for mortgage loans," an official at the central bank said.
"While growth in household lending has slowed, mortgage loans have continued to rise gradually. We need to take a wait-and-see approach to the impact of real estate policies announced in August," the official added.
The official, meanwhile, attributed the decline in other loans to reduced retail investment in the stock market and tighter lending controls by local banks.
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