SEOUL, Feb. 10 (Yonhap) — South Korean banks’ household loans continued to grow at a faster pace in January, driven by the strong growth of mortgage loans, central bank data showed Wednesday.
The value of outstanding bank loans to local households came to 996.4 trillion won (US$892.8 billion) as of end-January, up 7.6 trillion won from the previous month, according to the data from the Bank of Korea (BOK).
The January reading compares to a 6.7 trillion-won gain in December last year.
The BOK said the rise in lending was mainly attributable to solid demand for home-backed lending.
Banks’ mortgage loans grew 5 trillion won on-month to 726.9 trillion won in January.
South Korea has unveiled a set of measures to cool the overheated housing market but has failed to put a lid on home prices.
Non-mortgage loans rose 2.6 trillion won last month, accelerating from a 400 billion-won increase in December last year.
Unsecured loans accounted for the bulk of banks’ non-mortgage lending. South Korean households rushed in recent months to borrow money to meet demand for property-related costs and subscribe to initial public offering shares.
The financial regulator is seeking to tighten regulations on unsecured loans as excessive demand for credit loans is feared to hurt households’ debt-serving capacity and banks’ financial soundness.