SEOUL, October 7 (AJP) — South Korean nonfinancial corporations posted record net lending of 67.1 trillion won ($50.1 billion) in the second quarter as the Korean Inc. rushed to secure lending before interest rates went higher and chip boom fueled capital investment, the Bank of Korea (BOK) showed Wednesday.
The figure more than tripled from 20.8 trillion won in the first quarter and marked the highest level since the BOK began compiling the series in 2009.
Net lending is calculated by subtracting financial liability transactions from financial asset transactions, with a positive figure indicating that a sector supplied more funds than it raised.
The BOK attributed the increase partly to a sharp rise in corporate profits. Net income among listed companies rose to 189.0 trillion won in the second quarter from 111.2 trillion won in the previous quarter, according to Korea Exchange (KRX) figures.
Corporate financial asset transactions nearly doubled during the quarter, while funding also increased sharply, leaving companies with a substantially larger net surplus.
Across the domestic economy, net lending increased to 147.8 trillion won from 84.3 trillion won in the first quarter.
Households and nonprofit institutions moved in the opposite direction, with net lending falling to 60.7 trillion won from 79.2 trillion won as income declined and net home purchases increased, reducing available funds.
The household debt-to-gross domestic product ratio, meanwhile, fell to 81.1 percent from 85.3 percent at the end of the first quarter.
AJP Takeaways
- South Korean nonfinancial corporations posted record net lending of 67.1 trillion won in the second quarter, the highest since the series began in 2009.
- Corporate net lending more than tripled from the first quarter as listed companies' profits increased sharply.
- Households and nonprofit institutions saw net lending fall to 60.7 trillion won as income declined and net home purchases increased.
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