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| ▲ This file photo, taken July 18, 2023, shows information about a bank's loan programs in Seoul. (Yonhap) |
(LEAD) household loans-September tally
(LEAD) Banks' household loans up for 6th month in September on rising mortgages
(ATTN: UPDATES with reports of an emergency meeting in paras 10-14)
SEOUL, Oct. 12 (Yonhap) -- Household loans extended by banks in South Korea rose for the sixth straight month, led by rising home-backed loans amid high borrowing costs, central bank data showed Thursday.
Banks' outstanding household loans had come to 1,079.8 trillion won (US$805.9 billion) as of end-September, up 4.9 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).
The September gain slowed from a 6.9 trillion won rise the previous month, the biggest in over two years, and marks an on-month rise for six months in a row, the data showed.
Banks' home-backed loans rose 6.1 trillion won to 833.9 trillion won last month, slowing from a 7 trillion won on-month gain the previous month, while unsecured and other types of loans fell 1.3 trillion won to 244.7 trillion won over the cited period, according to the data.
Borrowing costs in Asia's fourth-largest economy remain high following the BOK's aggressive monetary tightening aimed at bringing surging inflation under control.
In August, the BOK kept its benchmark rate unchanged at 3.5 percent, the fifth straight month of a rate freeze in the face of a murky growth outlook and moderating inflation.
The rate freezes came after the BOK had delivered seven consecutive hikes in borrowing costs since April last year.
The central bank is set to hold a rate-setting meeting next week, and the bank is widely expected to stand pat again.
Last year, outstanding household loans slipped for the first time in 18 years amid higher rates.
The Financial Services Commission (FSC) later said an emergency meeting of related government offices was held on the day to review recent increases in household debt.
"The rate of increase in household loans slowed significantly in September from the July-August period," it said in a press release.
"But the participants agreed that they would have to continue to monitor the situation to determine whether the rise in household loans will stabilize additionally since the slower increase in September was partly due to an increase in the repayment of loans helped by Chuseok holiday incentives," it said of the meeting, attended by officials from the finance and construction-transportation ministries, the Bank of Korea, the state-run Korea Housing-Finance Corp. and the Korea Federation of Banks.
The FSC called for continued efforts by lenders to limit household loans to "repayable amounts," according to the financial regulator.
"The government will also continue its policy efforts to manage the rise in household debt," it said.
Banks' loans to companies also jumped as they extended further loans amid high demand.
Corporate loans extended by banks rose 11.3 trillion won last month, a record for any September since the central bank began to compile related data on a monthly basis in June 2009.
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