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SEOUL, May 11 (Yonhap) — Household loans from banks in South Korea rose for the first time in five months in April despite government restrictions on lending and rising borrowing costs. , central bank data revealed on Wednesday.
Outstanding bank loans to households stood at 1.06 trillion won ($829.8 billion) at the end of April, up 1.2 trillion won from the previous month, data showed. Bank of Korea (BOK).
This is the first monthly increase since December. It was also compared to a 1 trillion won decline recorded in March.
Outstanding household loans by the entire financial sector, including non-bank businesses, also increased by 1.3 trillion won in April, according to data from the Financial Services Commission and the Financial Supervisory Service.
April’s rise came despite government restrictions on lending amid concerns over soaring household debt and rising borrowing costs following the central bank’s decision to raise its rate manager to control growing inflationary pressure.
Last month, the BOK raised its benchmark rate by a quarter of a percentage point to 1.5%, the fourth rate hike since August last year. He hinted at further increases in the coming months.
“Banks are stepping up promotional efforts (to attract customers) by lowering spreads and increasing lending caps, which seems to be causing slow progress in loans frozen since December,” a BOK official said.
Observers expect Yoon Suk-yeol’s new government, which took office on Tuesday, to push to ease current restrictions on lending amid signs that household debt has been stably managed. these last months.
The BOK said the rise in household loans in April marked the slowest pace of growth on record in the month. The previous high was a 1.5 trillion won hike recorded in April 2010.
Of the total, banks’ mortgage loans to households increased by 2.1 trillion won in one month to reach 786.8 trillion won in April, while their other loans, mostly unsecured loans, fell by 900 billion won to reach 272.1 trillion won, according to the data.
Meanwhile, business loans from banks rose for the fourth consecutive month in April due to seasonal factors such as the need to pay value added taxes due in the month.
Their corporate loans stood at 1.106 trillion won at the end of April, up 12.1 trillion won from the previous month, the data showed. The monthly growth was faster than the 8.6 trillion won rise in the previous month.