ID :
98243
Tue, 01/05/2010 - 10:59
Auther :
Shortlink :
https://www.oananews.org//node/98243
The shortlink copeid
S. Korean banks to lend less to smaller firms in Q1
SEOUL, Jan. 5 (Yonhap) -- South Korean banks are expected to strengthen their grip on lending to smaller firms in the first quarter as the credit risk of such companies still remains high, the central bank said Tuesday.
An index gauging lender attitudes on loans to small and medium enterprises (SMEs)
reached minus 6 for the January-March period, compared with zero for the fourth
quarter of last year, 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.
"Local banks' lending criteria for SMEs is expected to be tougher in the first
quarter as they are lending less to smaller firms with low credit and incentives
for supporting the companies are decreasing," an official at the BOK said.
Although the Korean economy is recovering at a faster-than-expected pace, smaller
firms are still suffering from the business downturn and a funding squeeze.
Korean lenders plan to roll over their loans to smaller companies by an
additional six months until the end of June on the back of the continuation of
state loan guarantees. But as the government plans to gradually lower the portion
of its credit guarantees, incentives for banks to extend further loans to them
are scaling back.
Meanwhile, local banks plan to continue to strengthen their grip on home-backed
lending in the current quarter, affected by stiffened regulations on such loans.
An index measuring lender behavior with regard to mortgage loans reached minus 13
for the January-March period, unchanged from the previous quarter, it added.
The survey outcome shows that local lenders expect credit risks for SMEs to
remain at a high level in the first quarter because their business conditions are
not likely to improve markedly.
The index, which gauges the likelihood of borrowers not paying back debts,
reached 31 for the first quarter, up from 28 in the final quarter of 2009, the
BOK added.
sooyeon@yna.co.kr
(END)
An index gauging lender attitudes on loans to small and medium enterprises (SMEs)
reached minus 6 for the January-March period, compared with zero for the fourth
quarter of last year, 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.
"Local banks' lending criteria for SMEs is expected to be tougher in the first
quarter as they are lending less to smaller firms with low credit and incentives
for supporting the companies are decreasing," an official at the BOK said.
Although the Korean economy is recovering at a faster-than-expected pace, smaller
firms are still suffering from the business downturn and a funding squeeze.
Korean lenders plan to roll over their loans to smaller companies by an
additional six months until the end of June on the back of the continuation of
state loan guarantees. But as the government plans to gradually lower the portion
of its credit guarantees, incentives for banks to extend further loans to them
are scaling back.
Meanwhile, local banks plan to continue to strengthen their grip on home-backed
lending in the current quarter, affected by stiffened regulations on such loans.
An index measuring lender behavior with regard to mortgage loans reached minus 13
for the January-March period, unchanged from the previous quarter, it added.
The survey outcome shows that local lenders expect credit risks for SMEs to
remain at a high level in the first quarter because their business conditions are
not likely to improve markedly.
The index, which gauges the likelihood of borrowers not paying back debts,
reached 31 for the first quarter, up from 28 in the final quarter of 2009, the
BOK added.
sooyeon@yna.co.kr
(END)
