Banks' corporate loan growth slows to 4-year low in H1

SEOUL, Aug. 20 (Yonhap) -- South Korean bank's corporate loans grew at the
slowest pace in four years in the first half amid a protracted economic slump,
the central bank said Thursday.

Corporate lending stood at 546.9 trillion won (US$437.3 billion) in the
January-June period, up 3.5 percent from six months earlier, according to the
Bank of Korea (BOK). It was the slowest half-year growth since the first half of
2005 when such loans advanced 2.4 percent, it added.
"The growth of local banks' industrial lending slowed in the first half as loans
to builders declined," said Kim Hwa-yong, an official at the central bank.
"Larger firms resorted to bond sales instead of getting bank loans."
By industry, bank loans to manufacturers gained 4.4 percent to 195.4 trillion
won, slowing from a 11.1 percent expansion in the second half of 2008, the BOK
said. Those to construction firms declined 2.3 percent to 51.7 trillion won, the
first fall since the second half of 2004.
The BOK recently said that the Korean economy is expected to contract 1.6 percent
this year, up from its earlier estimate of a 2.4 percent fall. But the 2009
forecast still marks the worst performance since a 6.9 percent contraction in
1998 when the country was in the midst of the Asian financial crisis. The Korean
economy grew 2.2 percent last year.
sooyeon@yna.co.kr
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