South Korean banks’ household loans rose moderately in February from the previous month on increased demand from households moving to new homes, the central bank said Wednesday.

Local banks’ household loans, including home-backed loans and credit loans, reached 452.7 trillion won ($402 billion) as of the end of February, up 0.5 trillion won from a month earlier, according to preliminary data of the Bank of Korea.

Lenders’ household loans rebounded in February after dipping by 2.8 trillion won in January, as more households moved to new homes, offsetting banks’ attempt to rein in extending loans, the BOK said in a statement.

Corporate loans by local banks gained 5.1 trillion won on-month to 568.1 trillion won ($504 billion) in February, with the growth speed easing from a 6.9 trillion won gain in January, according to the central bank’s preliminary estimate.

Bank lending to large firms expanded sharply by 3.9 trillion won to 124.1 trillion won, due largely to SK Telecom Co. taking out loans to takeover Hynix Semiconductor.

Bank loans to smaller firms grew by 1.1 trillion won to 444 trillion won, it said.

The data was released one day before the central bank’s monthly rate-review meeting. Analysts widely expect the BOK to keep the key interest rate unchanged at 3.25 percent for the ninth straight month as rising oil prices stoke inflation and growth concerns. 

The South Korean government and financial watchdog have been trying to put a lid on mounting household debts as heavy indebtedness is feared to squeeze private consumption, one of two growth engines of the domestic economy.

Home-backed loans increased by 600 billion won last month from January, compared with an 800 billion won decline in the prior month.

South Korean banks’ corporate lending rose sharply in February from the previous month as mergers and acquisitions activities drove up lending to big corporations, the BOK said.

Corporate loans by local banks gained 5.1 trillion won on-month to 568.1 trillion won ($504 billion) in February, with the growth speed easing from a 6.9 trillion won gain in January, according to the central bank’s preliminary estimate.

Bank lending to large firms expanded sharply by 3.9 trillion won to 124.1 trillion won, due largely to SK Telecom Co. taking out loans to takeover Hynix Semiconductor.

Bank loans to smaller firms grew by 1.1 trillion won to 444 trillion won, it said.

The data was released one day before the central bank’s monthly rate-review meeting. Analysts widely expect the BOK to keep the key interest rate unchanged at 3.25 percent for the ninth straight month as rising oil prices stoke inflation and growth concerns.
 

(Yonhap News)