SEOUL-- Household loans extended by banks in South Korea grew for the first time in five months in April despite the government's curbs on lending and rising borrowing costs, central bank data showed Wednesday.
Banks' outstanding household loans had come to 1,060.2 trillion won (US$829.8 billion) as of end-April, up 1.2 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).
This marked the first on-month increase since December. It was also compared with a 1 trillion won decline tallied in March.
Outstanding household loans by the whole financial sector, including non-banking firms, also expanded 1.3 trillion won on-month in April, according to data from the Financial Services Commission and Financial Supervisory Service.
The April rise came despite the government's curbs on lending amid worries over runaway household debt and rising borrowing costs from the central bank's move to raise its policy rate to tame the rising inflation pressure.
Last month, the BOK raised its policy interest rate by a quarter percentage point to 1.5 percent, the fourth rate increase since August last year. It has hinted at further increases in the months to come.
"Banks are ramping up promotion efforts (to lure customers) by lowering spreads and raising loan ceilings, which appear to be causing lending that had been frozen since December to change though slowly," a BOK official said.
Observers expect the new Yoon Suk-yeol government, which took office on Tuesday, to push to ease the current tough curbs on lending amid signs that household debt has been stably managed in recent months.
The BOK said that the rise in household loans in April marked the slowest pace of growth ever recorded in the month. The previous record was a 1.5 trillion won rise registered in April 2010.
Of the total, banks' mortgage loans to households expanded 2.1 trillion won on-month to 786.8 trillion in April, while their other loans, mostly unsecured lending, shrank 900 billion won to 272.1 trillion won, the data showed.
Meanwhile, banks' corporate lending grew for the fourth straight month in April due to such seasonal reasons as the need to pay value-added taxes due in the month.
Their corporate loans came to 1,106 trillion won as of end-April, up 12.1 trillion won from a month earlier, the data showed. The on-month growth was faster than the previous month's 8.6 trillion won rise.
Source: Yonhap News Agency