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47285
Tue, 02/24/2009 - 12:00
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https://www.oananews.org//node/47285
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Korea's household credit growth slows in Q4
SEOUL, Feb. 24 (Yonhap) -- South Korea's household credit growth slowed in the fourth quarter from three months earlier as cash-strapped lenders were reluctant to extend loans amid a slumping economy, the central bank said Tuesday.
As of the end of December, outstanding household credit stood at 688.2 trillion
won (US$456.5 billion), up 9.1 percent from a year earlier, according to the Bank
of Korea (BOK). The fourth-quarter figure slowed from a 10.7 percent on-year gain
in the third quarter, it added.
But for the whole year of 2008, household credit expanded 57.6 trillion won,
accelerating from a 48.7 trillion won gain the previous year, the BOK said.
Household credit refers to credit purchases and loans for households extended by
the nation's financial institutions, including commercial lenders and mutual
savings banks.
"Last quarter, the growth of household credit eased as lending institutions
beefed up risk management, hit by the global financial turmoil," Lee Young-bog,
head of the BOK's monetary and financial statistics team, told reporters. "Given
falling disposable income, household's capacity to repay debt deteriorated in
2008 compared with 2007."
Household lending extended by local banks grew 6.8 percent on-year to 388.6
trillion won in the fourth quarter. The growth moderated from a 7.5 percent
on-year expansion in the July-September period, the central bank said.
The data came as the South Korean economy is rapidly heading into a recession as
exports tumble and domestic demand remains sluggish.
Local banks are increasingly reluctant to extend loans to households and smaller
firms as the slowing economy and the credit crunch are increasing the amount of
bad loans. Meanwhile, increasing debt and dipping real income, coupled with
falling asset values, are dealing a blow to household's debt repayment burdens.
Asia's fourth-largest economy shrank 5.6 percent in the fourth quarter from three
months earlier. The Korean economy is widely expected to post negative growth
this year, the first annual contraction since the 1997-98 Asian financial crisis.
Since October, the BOK has cut its key interest rate by 3.25 percentage points to
an all-time low of 2 percent in a bid to bolster the slumping economy.
As of the end of December, outstanding household credit stood at 688.2 trillion
won (US$456.5 billion), up 9.1 percent from a year earlier, according to the Bank
of Korea (BOK). The fourth-quarter figure slowed from a 10.7 percent on-year gain
in the third quarter, it added.
But for the whole year of 2008, household credit expanded 57.6 trillion won,
accelerating from a 48.7 trillion won gain the previous year, the BOK said.
Household credit refers to credit purchases and loans for households extended by
the nation's financial institutions, including commercial lenders and mutual
savings banks.
"Last quarter, the growth of household credit eased as lending institutions
beefed up risk management, hit by the global financial turmoil," Lee Young-bog,
head of the BOK's monetary and financial statistics team, told reporters. "Given
falling disposable income, household's capacity to repay debt deteriorated in
2008 compared with 2007."
Household lending extended by local banks grew 6.8 percent on-year to 388.6
trillion won in the fourth quarter. The growth moderated from a 7.5 percent
on-year expansion in the July-September period, the central bank said.
The data came as the South Korean economy is rapidly heading into a recession as
exports tumble and domestic demand remains sluggish.
Local banks are increasingly reluctant to extend loans to households and smaller
firms as the slowing economy and the credit crunch are increasing the amount of
bad loans. Meanwhile, increasing debt and dipping real income, coupled with
falling asset values, are dealing a blow to household's debt repayment burdens.
Asia's fourth-largest economy shrank 5.6 percent in the fourth quarter from three
months earlier. The Korean economy is widely expected to post negative growth
this year, the first annual contraction since the 1997-98 Asian financial crisis.
Since October, the BOK has cut its key interest rate by 3.25 percentage points to
an all-time low of 2 percent in a bid to bolster the slumping economy.
