ID :
62765
Wed, 05/27/2009 - 15:43
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https://www.oananews.org//node/62765
The shortlink copeid
Korea`s Q1 household credit dips the most in over 10 years
By Kim Soo-yeon
SEOUL, May 27 (Yonhap) -- South Korea's household credit declined by the biggest
amount in more than 10 years in the first quarter mainly because individuals cut
back on card spending amid a slumping economy, the central bank said Wednesday.
As of the end of March, outstanding household credit stood at 683.7 trillion won
(US$545 billion), down 4.6 trillion won from three months earlier, according to
the Bank of Korea (BOK). The figures marked the largest quarterly fall since the
third quarter of 1998 when household credit plunged 7.1 trillion won, 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.
"Last quarter, household credit fell as financial firms beefed up their risk
management amid the slowing economy," Lee Sang-yong, an official at the BOK said.
"In particular, individuals curtailed credit card spending, reflecting concerns
over sluggish domestic demand."
Credit purchases shed 4 trillion won on-quarter to 36 trillion won, marking the
largest fall since the third quarter of 2003 when they tumbled 6 trillion won in
the aftermath of the bursting of the credit card bubble.
Household lending extended by local financial firms reached 647.7 trillion won as
of the end of March, down 638.3 billion won from three months earlier, the
central bank said.
The data came as the South Korean economy is expected to contract 2.4 percent
this year, the worst performance in 11 years, due to falling exports and flaccid
domestic demand.
Local banks remained cautious about expanding loans to households and smaller
firms as problem loans are piling up. Meanwhile, increasing debt and dipping real
income, coupled with falling asset values, are dealing a blow to household's debt
repayment burdens.
In May, the BOK froze its key interest rate at an all-time low of 2 percent for
the third straight month, saying that a sharp decline in economic activity had
markedly eased. It made six consecutive rate cuts between early October and
February in a bid to kickstart the sputtering economy.
sooyeon@yna.co.kr
(END)
SEOUL, May 27 (Yonhap) -- South Korea's household credit declined by the biggest
amount in more than 10 years in the first quarter mainly because individuals cut
back on card spending amid a slumping economy, the central bank said Wednesday.
As of the end of March, outstanding household credit stood at 683.7 trillion won
(US$545 billion), down 4.6 trillion won from three months earlier, according to
the Bank of Korea (BOK). The figures marked the largest quarterly fall since the
third quarter of 1998 when household credit plunged 7.1 trillion won, 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.
"Last quarter, household credit fell as financial firms beefed up their risk
management amid the slowing economy," Lee Sang-yong, an official at the BOK said.
"In particular, individuals curtailed credit card spending, reflecting concerns
over sluggish domestic demand."
Credit purchases shed 4 trillion won on-quarter to 36 trillion won, marking the
largest fall since the third quarter of 2003 when they tumbled 6 trillion won in
the aftermath of the bursting of the credit card bubble.
Household lending extended by local financial firms reached 647.7 trillion won as
of the end of March, down 638.3 billion won from three months earlier, the
central bank said.
The data came as the South Korean economy is expected to contract 2.4 percent
this year, the worst performance in 11 years, due to falling exports and flaccid
domestic demand.
Local banks remained cautious about expanding loans to households and smaller
firms as problem loans are piling up. Meanwhile, increasing debt and dipping real
income, coupled with falling asset values, are dealing a blow to household's debt
repayment burdens.
In May, the BOK froze its key interest rate at an all-time low of 2 percent for
the third straight month, saying that a sharp decline in economic activity had
markedly eased. It made six consecutive rate cuts between early October and
February in a bid to kickstart the sputtering economy.
sooyeon@yna.co.kr
(END)
