Demand for new loans to rise in Q2
Published: 06 Apr. 2017, 20:02
The overall index measuring demand for bank loans came to 8 for the April-June quarter, compared with 12 a quarter earlier, the Bank of Korea (BOK) said in a statement.
A reading above zero means bank lending will continue to increase, while a reading below the benchmark means demand will likely shrink.
The quarterly reading is based on a survey of 15 banks and 184 nonbank lenders between March 2 and 17.
Demand for fresh loans from big companies is expected to grow in the second quarter, while the index gauging the demand from small and medium-sized companies comes to 20 for the April-June period, compared with 13 for the previous quarter, it said.
The BOK said demand for new mortgages is likely to decrease in the second quarter due to a possible slowdown in home transactions and a rate hike.
The government has tightened restrictions on housing-related borrowings to put a cap on rapidly growing household debt.
Korea’s outstanding household credit - which is composed of household loans and credit card spending - came to 1,344.3 trillion won ($1.19 trillion) at the end of 2016, up 11.7 percent from a year earlier.
A separate index measuring demand for fresh loans from local savings banks came to 13 for the second quarter, up from 11 a quarter earlier, according to the BOK.
YONHAP
with the Korea JoongAng Daily
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