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Banks likely to tighten lending criteria in Q4: Survey

Published: 27 Oct. 2025, 15:53 Updated: 27 Oct. 2025, 16:02

Customers visit a commercial bank in Seoul for consultation on receiving loans on Oct. 15. [YONHAP]

Banks in Korea are expected to tighten lending standards in the fourth quarter, particularly for household loans, as authorities have tightened loan restrictions to clamp down on the overheated housing market, a central bank survey showed on Monday.

According to a Bank of Korea (BOK) survey of 203 financial institutions, including 18 banks and 26 mutual savings banks, the index measuring banks' lending attitudes stood at minus 14 for the October-December period.

A reading below zero indicates that more lenders plan to tighten rather than ease credit standards.

The figure compares with 7 in the first quarter, minus 13 in the second quarter and minus 28 in the third quarter.

By sector, the index for home mortgage lending stood at minus 28 for the fourth quarter, and that for loans to large corporations came in at 6.

“Lending attitudes toward businesses are expected to ease somewhat, while lending attitudes toward households are projected to tighten in line with the government's real estate policy measures,” a BOK representative said.

“The survey also found that credit risks for both companies and households are projected to remain a persistent concern amid domestic and global uncertainties,” the representative added.

The government has introduced a series of measures to cool the real estate market. Most recently, it designated 21 additional districts in Seoul as speculative zones, bringing all 25 districts in the capital under stricter regulations.

It also tightened lending rules, cutting the mortgage loan cap to as low as 200 million won ($139,665) from the 600 million won set in June.

Yonhap