[THE INVESTOR] The growth of local financial institutions’ loans to companies has slowed in the second quarter of the year, Bank of Korea data showed on Aug. 29.

The data showed that loans given to manufacturing companies came to 970.7 trillion won (US$863.13 billion) at the end of June, rising 1.2 percent or 11.6 trillion won from the end of the first quarter. 




In comparison, corporate loans had increased by 15.7 trillion won from December 2015 to March this year. The drop in the quarterly increase is thought to have been brought on by financial institutions applying tougher standards in approving loans. 
Outstanding loans given to producers of transportation, which includes shipbuilders, dropped 3.3 percent during the second quarter of the year to come in at 25.1 trillion won at the end of June.

During the second quarter of the year, loans extended to manufacturing companies rose 1.2 trillion won to come in at 330.4 trillion won. In comparison, loans taken out by manufacturing companies increased 4.8 trillion won during the first quarter of the year.

In contrast, the outstanding loans extended to companies in the service sector increased 1.9 percent or by 10.2 trillion won during the second quarter of the year. Although the figure inched down from the first quarter’s 10.4 trillion won, it is 1 trillion won higher than that recorded in the second quarter of 2015.

For the service industry, real estate-backed loans fed the overall rise. During the second quarter of the year, real estate-backed loans taken out by companies in the sector increase 5.8 trillion won.

By Choi He-suk (cheesuk@heraldcorp.com)