S. Korea's household credit rises in Q3

SEOUL, Nov. 25 (Yonhap) -- South Korea's household credit rose in the third
quarter as home-backed loans by nonbank financial firms picked up and improving
consumer confidence boosted card spending, the central bank said Wednesday.

As of the end of September, outstanding household credit stood at 712.8 trillion
won (US$616.7 billion), up 15 trillion won or 2.2 percent from three months
earlier, according to the Bank of Korea (BOK).
Household credit refers to credit purchases and loans for households extended by
financial institutions, including commercial lenders and mutual savings banks.
"Despite the eased growth of bank mortgage lending, the pace of home-backed
lending provided by nonbank financial institutions picked up," a BOK official
said. "Amid improving consumer sentiment, households increased card spending."
Household lending extended by local financial institutions reached 675.6 trillion
won as of the end of September, up 14.1 trillion won from three months earlier,
the central bank said.
To address concerns that a jump in home-backed lending could spark a potential
asset bubble, the government imposed stricter regulatory controls on bank
mortgage loans in July and September.
Bank mortgage loans rose by 4.8 trillion won in the third quarter, slowing from a
7.1 trillion won gain the previous quarter. But home lending by nonbank financial
institutions expanded 3.2 trillion won, accelerating from a 2 trillion won
increase in the second quarter.
Credit purchases added 1 trillion won on-quarter to 37.2 trillion won as more
people bought cars to receive tax incentives, the BOK said.
The data came as the South Korean economy grew 2.9 percent in the July-September
period from three months earlier, the fastest quarterly expansion in more than
seven years.
On Nov. 12, the BOK froze the key interest rate at a record low of 2 percent for
the ninth consecutive month after cutting it by a total of 3.25 percentage points
between October 2008 and February.
BOK Gov. Lee Seong-tae said the growth of home loans continued to slow on recent
loan regulations and economic uncertainty persists, hinting that the bank would
be not in hurry to tighten monetary policy for the time being.
sooyeon@yna.co.kr
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