Household loans extended by South Korean banks grew at a slower pace in December than a month earlier as households’ balance sheets improved on the back of year-end bonuses and offset a rise in mortgage lending, the central bank said Wednesday.

Outstanding household loans extended by local banks, including home-backed and credit loans, reached 480.4 trillion won ($453 billion) as of end-December, up 2.9 trillion won from the previous month, according to the Bank of Korea (BOK).

The December monthly gain represents a slowdown from the 3.1-trillion-won growth in November, the data showed.

Banks’ mortgage loans grew 2.8 trillion won on-month to 328.2 trillion won as of December, accelerating from a 2.1 trillion won on-month gain in November.

Corporate lending by banks, meanwhile, sharply declined in December as local firms paid off a large sum of debts, the BOK said.

Banks’ corporate loans dropped by 12.7 trillion won on-month to 623.8 trillion won in December, compared with a 5.8 trillion won on-month advance in November, it said.

Bank lending to larger companies fell 7.1 trillion won to 150.4 trillion won as they repaid debts to dress up their balance sheets ahead of the end of the year. Bank loans to smaller companies also sank 5.6 trillion won to 473.4 trillion won, compared with a 4.3 trillion won rise a month earlier. (Yonhap News)