S. Korea`s household credit growth slows in Q3

SEOUL, Dec. 12 (Yonhap) -- South Korea's household credit growth decelerated in the third quarter as cash-strapped banks were reluctant to extend loans amid a credit crunch, the central bank said Friday.
As of the end of September, outstanding household credit stood at 676 trillion
won (US$499.7 billion), up 15.7 trillion won from three months earlier, according
to the Bank of Korea (BOK). The third-quarter gain is lower than the
19.8-trillion won expansion during the April-June period, it added.
Household credit refers to credit purchases and loans for households extended by
the nation's financial institutions, including commercial lenders and mutual
savings banks.
"The growth of local banks' lending to households decelerated due to decreased
home-backed loans," the central bank said.
Outstanding household loans extended by financial institutions stood at 637.7
trillion won as of the end of September, up 14.8 trillion won from three months
ago. During the April-June period, the lending increased by 17.9 trillion won,
according to the bank.
Of household loans, home-backed loans gained by 5.07 trillion won on-quarter to
an outstanding 234.56 trillion won in the third quarter, smaller than the 5.2
trillion won increase the previous quarter, it said.
The data comes as rising debts, together with a deepening economic slump, are
sapping household and corporate spending, denting domestic demand.
The South Korean economy, Asia's fourth-largest, may face a further decline next
year in its growth expansion due to a sharper than expected drop in exports and
weak domestic demand, the bank said earlier in the day.
The economy is expected to grow 2 percent next year, slowing from this year's
estimated 3.7 percent gain, it said. The growth estimate, if realized, would be
the lowest since 1998 when the economy shrank 6.9 percent due to a financial
meltdown.
sam@yna.co.kr
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