Growth of corporate loans picks up in Q1

SEOUL, May 19 (Yonhap) -- The growth of bank loans to companies accelerated in
the first quarter from three months earlier mainly because government credit
guarantees helped smaller companies borrow more, the central bank said Monday.
Bank lending to corporate borrowers grew 2.6 percent on-quarter in the
January-March period to an outstanding 542.5 trillion won (US$436.3 billion),
according to the Bank of Korea (BOK). The comparable growth figure was 2.2
percent in the last quarter of 2008.
By industry, bank loans to manufacturers rose 2.7 percent to 192.3 trillion won
while those to the construction sector grew 0.1 percent to 52.9 trillion won.
The data came as local banks remained cautious about expanding loans to smaller
companies due to a rising number of non-performing loans and loan defaults,
hurting their financial health. The government has provided credit guarantees for
bank loans to small and medium enterprises in a bid to help free up credit.
The South Korean economy grew 0.1 percent in the first quarter from three months
earlier on the back of the government's fiscal spending and rate cuts by the BOK.
Asia's fourth-largest economy shrank 5.1 percent in the last quarter of 2008.
The BOK had made six consecutive rate reductions totaling 3.25 percentage points
to a record low of 2 percent until February in a bid to bolster the slowing
economy.
sooyeon@yna.co.kr
(END)