ID :
83223
Tue, 10/06/2009 - 11:01
Auther :
Shortlink :
https://www.oananews.org//node/83223
The shortlink copeid
S. Korean banks to lend less to households in Q4
SEOUL, Oct. 6 (Yonhap) -- South Korean banks are expected to continue to tighten
their grip on home-backed lending in the fourth quarter, affected by stiffened
regulations on such loans, the central bank said Tuesday.
An index gauging lender attitudes to mortgage loans reached minus 16 for the
October-December period, compared with minus 19 for the third quarter, according
to a survey of 16 lenders by the Bank of Korea (BOK).
The index figure is compiled on the basis of banks' assessment of economic
conditions and other factors such as interest rates.
The lower the reading, the more likely that banks will tighten their restrictions
on lending. A reading below zero means that the number of banks that will stiffen
lending criteria surpasses that of lenders planning to ease their grip on loans.
"A series of toughened mortgage lending rules prompted local banks to be wary of
expanding home-backed lending. In the fourth quarter, they are expected to
maintain such attitudes," said Choi Hyong-jin, an official at the BOK.
The survey results come as the financial watchdog in July strengthened rules on
home lending by allowing banks to extend such loans amounting to up to 50 percent
of the value of a residence in Seoul and its adjacent areas, down from 60
percent. In September, it further stiffened rules on such loans by prompting
banks to make loans based on borrowers' income.
Amid record-low borrowing costs home loans have sharply risen, sparking concerns
over a possible asset bubble. BOK Gov. Lee Seong-tae hinted on Sept. 10 that the
bank may conduct a rate increase if housing prices continue to rise.
The survey outcome shows that local lenders expect household credit risk to
remain at a high level in the final quarter of the year as rising lending rates
are feared to eat into households' capacity to repay debt.
The index, which gauges the likelihood of borrowers not paying back debts,
reached 25 for the fourth quarter, up from 16 in the third quarter.
The index had stayed at 25 for the third straight quarter in the April-June
period, the highest level since the fourth quarter of 2003 when the index came in
at 32.
sooyeon@yna.co.kr
(END)
their grip on home-backed lending in the fourth quarter, affected by stiffened
regulations on such loans, the central bank said Tuesday.
An index gauging lender attitudes to mortgage loans reached minus 16 for the
October-December period, compared with minus 19 for the third quarter, according
to a survey of 16 lenders by the Bank of Korea (BOK).
The index figure is compiled on the basis of banks' assessment of economic
conditions and other factors such as interest rates.
The lower the reading, the more likely that banks will tighten their restrictions
on lending. A reading below zero means that the number of banks that will stiffen
lending criteria surpasses that of lenders planning to ease their grip on loans.
"A series of toughened mortgage lending rules prompted local banks to be wary of
expanding home-backed lending. In the fourth quarter, they are expected to
maintain such attitudes," said Choi Hyong-jin, an official at the BOK.
The survey results come as the financial watchdog in July strengthened rules on
home lending by allowing banks to extend such loans amounting to up to 50 percent
of the value of a residence in Seoul and its adjacent areas, down from 60
percent. In September, it further stiffened rules on such loans by prompting
banks to make loans based on borrowers' income.
Amid record-low borrowing costs home loans have sharply risen, sparking concerns
over a possible asset bubble. BOK Gov. Lee Seong-tae hinted on Sept. 10 that the
bank may conduct a rate increase if housing prices continue to rise.
The survey outcome shows that local lenders expect household credit risk to
remain at a high level in the final quarter of the year as rising lending rates
are feared to eat into households' capacity to repay debt.
The index, which gauges the likelihood of borrowers not paying back debts,
reached 25 for the fourth quarter, up from 16 in the third quarter.
The index had stayed at 25 for the third straight quarter in the April-June
period, the highest level since the fourth quarter of 2003 when the index came in
at 32.
sooyeon@yna.co.kr
(END)
