Lenders plug gap by shifting to corporate loansCorporate loans surged in the third quarter as the regulator’s push to curb household debt prompted Korean lenders to rely more on this revenue stream, the central bank said yesterday.
Such lending by banks and non-bank institutions stood at 763.4 trillion won ($676.5 billion) as of the end of September, up 16.9 trillion won from three months earlier, according to the Bank of Korea.
From one year earlier, such loans grew 5.5 percent in the third quarter, the fastest on-year expansion since 6.5 percent in the same quarter of 2009.
A central bank official said that banks’ lending to industries jumped amid an underlying rising trend for new loans and the watchdog’s push to stymie household loans.
The financial regulator has been ramping up efforts to curb household debt growth in this area to safeguard consumer spending. It advised local banks to set the monthly average growth of home loans at 0.6 percent. In August, some local lenders began refusing to extend new home loans.
In the third quarter, local banks’ corporate loans grew 18.1 trillion won on-quarter to 602.6 trillion won, the largest quarterly expansion since 23.5 trillion won in the third quarter of 2008.
By industry, lending to manufacturers reached 250.2 trillion won as of end-September, up 7.8 trillion won from three months earlier. Loans to the service sector advanced 8.2 trillion won on-quarter to 406.3 trillion won, it added.
Lending to builders increased for the first time in 12 months in the third quarter, the data showed.
Loans to construction companies grew by 1.1 trillion won to 54.3 trillion won, a significant turnaround after the sector saw a 1.7 trillion won fall in the second quarter.Yonhap
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