Household loans extended by banks in South Korea rebounded in April, 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 1,103.6 trillion won (US$805 billion) as of end-April, up 5.1 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).
The April reading marks a rebound from a 1.7 trillion-won fall the previous month, the data showed.
Banks’ home-backed loans rose 4.5 trillion won to 865 trillion won last month, accelerating from a 0.5 trillion-won on-month gain the previous month, while unsecured and other types of loans rose 0.6 trillion won to 237.5 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 inflati
on under control.
Last month, South Korea’s central bank kept its policy rate unchanged at 3.5 percent for the 10th consecutive time since February last year. The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.
Banks’ loans to companies also rose 11.9 trillion won last month, following the previous month’s 10.4 trillion-won rise, the data showed.
Meanwhile, household loans extended by all financial institutions in the country, including savings banks and insurance firms, grew 4.1 trillion won from a month earlier in April, according to the Financial Services Commission.
Home-backed loans extended by all financial firms gained 4.1 trillion won due to the sharp rise in loans from banks, while nonmortgage loans only added 30 billion won from a month before, it said.
Source: Yonhap News Agency