Household loans continue to increase in October

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Household loans continue to increase in October

Korean banks' household loans continued to grow at a fast pace in October, driven by home-backed lending amid soaring home prices, central bank data showed Wednesday.
The value of outstanding bank loans to local households came to 968.4 trillion won ($868.4 billion) as of end-October, up 10.6 trillion won from the previous month, according to the data from the Bank of Korea (BOK).
The October reading is compared with a 9.6 trillion-won gain in September and an all-time high of an 11.7 trillion-won gain in August.
The BOK said the rise in lending was mainly attributable to solid demand for home-backed lending.
Banks' mortgage loans grew 6.8 trillion won on month to 709.3 trillion won in October, accelerating from a 6.7 trillion-won increase the previous month.
Korea has unveiled a set of measures to cool the overheated housing market but has failed to put a lid on home prices.
Nonmortgage loans gained 3.8 trillion won last month, accelerating from a 3 trillion-won increase in September.
Unsecured loans accounted for the bulk of banks' nonmortgage lending. Korean households rushed in recent months to borrow money to meet demand for property-related costs and subscribe to initial public offering shares.
The financial regulator is seeking to tighten regulations on unsecured loans as excessive demand for credit loans is feared to hurt households' debt-serving capacity and banks' financial soundness.
Meanwhile, outstanding corporate loans totaled 975.2 trillion won at the end of October, up 9.1 trillion won from the previous month. It accelerated from a 5.1 trillion-won gain in September.
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