The growth of South Korea's household credit sharply slowed in the first quarter as sluggish real estimate markets and home-backed loan controls discouraged demand for mortgage lending, the central bank said Wednesday.
As of the end of March, outstanding household credit stood at 739.1 trillion won (US$589.9 billion), up 5.4 trillion won from three months earlier, according to the Bank of Korea (BOK). The first-quarter figure compared with a 20.9 trillion won gain in the previous quarter.
It also marked the slowest expansion since the first quarter of 2009 when household credit declined 4.6 trillion won, hit by the global financial turmoil.
Household credit refers to credit purchases and loans for households extended by financial institutions, including commercial lenders and mutual savings banks.
"The growth of household credit slowed last quarter mainly because sluggish property markets sparked weaker demand for mortgage lending," a BOK official said.
The BOK said the 5.4 trillion won on-quarter expansion in the first three months of this year was below average first quarter growth in recent years, indicating that regulatory mortgage loan controls introduced late last year took effect.
Household lending extended by local financial institutions reached 696.6 trillion won as of the end of March, up 4.6 trillion won from three months earlier, the central bank said. Household loans by local banks grew by 700 billion won to 410.2 trillion won.
Home-backed lending by banks rose 3 trillion won in the first quarter, slowing from a 5 trillion won expansion in the fourth quarter of last year.
Credit purchases expanded by 800 billion won to 42.5 trillion won as improving consumer confidence made more people buy durable goods, including cars, the BOK said.
The data came as the BOK froze the key interest rate at a record low of 2 percent for the 15th straight month in May amid heightened economic uncertainty stemming from euro-zone debt fears.//Yonhap
As of the end of March, outstanding household credit stood at 739.1 trillion won (US$589.9 billion), up 5.4 trillion won from three months earlier, according to the Bank of Korea (BOK). The first-quarter figure compared with a 20.9 trillion won gain in the previous quarter.
It also marked the slowest expansion since the first quarter of 2009 when household credit declined 4.6 trillion won, hit by the global financial turmoil.
Household credit refers to credit purchases and loans for households extended by financial institutions, including commercial lenders and mutual savings banks.
"The growth of household credit slowed last quarter mainly because sluggish property markets sparked weaker demand for mortgage lending," a BOK official said.
The BOK said the 5.4 trillion won on-quarter expansion in the first three months of this year was below average first quarter growth in recent years, indicating that regulatory mortgage loan controls introduced late last year took effect.
Household lending extended by local financial institutions reached 696.6 trillion won as of the end of March, up 4.6 trillion won from three months earlier, the central bank said. Household loans by local banks grew by 700 billion won to 410.2 trillion won.
Home-backed lending by banks rose 3 trillion won in the first quarter, slowing from a 5 trillion won expansion in the fourth quarter of last year.
Credit purchases expanded by 800 billion won to 42.5 trillion won as improving consumer confidence made more people buy durable goods, including cars, the BOK said.
The data came as the BOK froze the key interest rate at a record low of 2 percent for the 15th straight month in May amid heightened economic uncertainty stemming from euro-zone debt fears.//Yonhap
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