Banks’ household loans rise for 6th month in September, but gains slow

Household loans extended by banks in South Korea rose for a sixth straight month in September, led by an increase in mortgages, central bank data showed Friday. Banks' outstanding household loans came to 1,135.7 trillion won (US$841 billion) as of end-September, up 5.7 trillion won from a month earlier, according to the data from the Bank of Korea (BOK). The reading marks a sharp deceleration from a 9.2 trillion-won gain in August, the highest on-month increase in 37 months. Banks' home-backed loans added 6.2 trillion won from a month earlier to 896.8 trillion won in September, also slowing from an 8.2 trillion-won rise, the highest on-month increase in the country's history. Policymakers have blamed a recent rise in home prices, especially in the Seoul metropolitan area, for the sharp increase in mortgages. Borrowing costs in the country have remained high since February 2023, when the central bank delivered its latest interest rate hike. The BOK has since stood pat on its key rate. In September, unse cured or other types of loans extended by banks fell 0.5 trillion won to 237.9 trillion won. Corporate loans extended by banks gained 4.3 trillion won from a month earlier to 1,316.2 trillion won in September, compared with a 7.2 trillion won on-month increase the previous month, the data showed. Source: Yonhap News Agency