ID :
31127
Wed, 11/19/2008 - 18:39
Auther :
Shortlink :
https://www.oananews.org//node/31127
The shortlink copeid
Growth of banks` industrial loans slows in Q3
SEOUL, Nov. 19 (Yonhap) -- South Korean banks' industrial loans grew at a slower pace in the third quarter than three months earlier as lenders strengthened their grips on lending for smaller firms, the central bank said Wednesday.
Corporate lending rose 4.8 percent on-quarter to an outstanding 516.9 trillion
won (US$355.8 billion) in the July-September period, according to the Bank of
Korea (BOK). The third-quarter figure slowed from a 5.9 percent expansion in the
second quarter, it added.
"The growth of local banks' industrial lending slowed down, reflecting that
lenders beefed up risk management by tightening their grips on lending for
smaller companies," said Kim Hwa-yong, an official at the BOK.
By industry, bank loans to builders slowed to a nearly 2-year low amid the
slumping construction market. Lending to local builders increased 4.6 percent
on-quarter to an outstanding 53.9 trillion won in the third quarter, the BOK
said. It was the slowest growth since the fourth quarter of 2006 when such loans
advanced 4.5 percent.
The data came as the slowing economy is feared to damage the financial soundness
of local lenders with the loan default rate by smaller firms rising.
In particular, with the slowing economy resulting in a huge number of unsold
apartments, many cash-strapped small and mid-sized construction companies are
struggling to service debts taken out during the 2005-2006 housing boom.
The government and the banking industry plan to restructure nonviable builders
and savings banks in a move to prevent possible collapses from weighing on the
real economy and the banking sector. Creditor banks of South Korea's ailing
builders encouraged them Tuesday to enter a debt rescheduling program in return
for rolling over their debts.
In November, the BOK slashed its key interest rate for the third time in a month
to bolster the slowing economy. In a monthly policy meeting, the BOK lowered the
benchmark seven-day repo rate by a quarter percentage point to 4 percent, the
lowest level since 2006, cutting a combined 1.25 percentage point in the span of
a month.
sooyeon@yna.co.kr
(END)
Corporate lending rose 4.8 percent on-quarter to an outstanding 516.9 trillion
won (US$355.8 billion) in the July-September period, according to the Bank of
Korea (BOK). The third-quarter figure slowed from a 5.9 percent expansion in the
second quarter, it added.
"The growth of local banks' industrial lending slowed down, reflecting that
lenders beefed up risk management by tightening their grips on lending for
smaller companies," said Kim Hwa-yong, an official at the BOK.
By industry, bank loans to builders slowed to a nearly 2-year low amid the
slumping construction market. Lending to local builders increased 4.6 percent
on-quarter to an outstanding 53.9 trillion won in the third quarter, the BOK
said. It was the slowest growth since the fourth quarter of 2006 when such loans
advanced 4.5 percent.
The data came as the slowing economy is feared to damage the financial soundness
of local lenders with the loan default rate by smaller firms rising.
In particular, with the slowing economy resulting in a huge number of unsold
apartments, many cash-strapped small and mid-sized construction companies are
struggling to service debts taken out during the 2005-2006 housing boom.
The government and the banking industry plan to restructure nonviable builders
and savings banks in a move to prevent possible collapses from weighing on the
real economy and the banking sector. Creditor banks of South Korea's ailing
builders encouraged them Tuesday to enter a debt rescheduling program in return
for rolling over their debts.
In November, the BOK slashed its key interest rate for the third time in a month
to bolster the slowing economy. In a monthly policy meeting, the BOK lowered the
benchmark seven-day repo rate by a quarter percentage point to 4 percent, the
lowest level since 2006, cutting a combined 1.25 percentage point in the span of
a month.
sooyeon@yna.co.kr
(END)
