Household loans from 5 major banks grow for 10th straight month in February

Signs about a bank's loan programs  puts up on the exterior of a lender in Seoul, Feb. 25. Yonhap

Signs about a bank’s loan programs puts up on the exterior of a lender in Seoul, Feb. 25. Yonhap

Household loans extended by the five major lenders here rose for the 10th consecutive month in February, but their growth slowed to the smallest in eight months on rising rates, industry sources said Saturday.

The loans were up 723 billion won ($541 million) from a month earlier to 696.37 trillion won as of the end of February, according to the sources.

The gain sharply slowed from January’s 2.9 trillion won rise.

Household loans from the banks have been on a steady rise since May 2023, when they posted a month-on-month increase for the first time in 18 months.

In February, the rise was led by a 2.17 trillion won increase in home-backed loans, compared with a 4.43 trillion won gain the previous month.

Credit loans dropped by 1.09 trillion won, marking a decrease for the fourth consecutive month.

The slowdown in household loans came amid a slump in the home market and rising market rates.

Also, tightened lending criteria were blamed for the slow-down, the sources said.

The central bank froze its key rate for the ninth straight session and cooled down expectations over early rate cuts last month amid woes over slower-than-expected inflation moderation and high household debt.

The Bank of Korea (BOK) kept its policy rate unchanged at 3.5 percent.

The BOK has stood pat following rate freezes last February, April, May, July, August, October, November and January. The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023. (Yonhap)

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