Household loans rise by 5 trillion won in May

Loans extended by local banks to households increased slightly in May, while corporate loans shrank, central bank data showed Wednesday.

Household loans by banks increased by 5 trillion won ($4.23 billion) last month, picking up from a 4.5 trillion won increase the month before, according to the data from the Bank of Korea (BOK).

The BOK noted households’ credit spending tends to increase in May when the country celebrates many family-oriented holidays, such as Parents’ Day and Children’s Day.

Last month, home-backed bank loans gained 2.8 trillion won, a drop from a 3.7 trillion won rise the previous month.

Other loans, including credit loans, gained 2.2 trillion won, marking a sharp rise from an 800 billion won increase in April.

Corporate loans, on the other hand, slowed to a 6 trillion won increase from a 6.6 trillion won rise in April.

Borrowing by large conglomerates added 600 billion won in May, slowing from a 1.6 trillion won increase the month before, while bank loans to small and medium-sized firms gained 5.4 trillion won last month, quickening from a 5 trillion won increase in April.

Low corporate investment has been partly blamed for slowing growth in Asia’s fourth-largest economy, which unexpectedly contracted 0.4 percent in the first quarter from three months earlier.

Bank deposits increased 7.7 trillion won in May, marking a turnaround from a 5.2 trillion won drop the previous month.

Yonhap