April 26, 2024

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[THE INVESTOR] Loans extended by savings banks, insurers and other non-bank institutes reached a record high in April as local banks tightened lending regulations, industry data showed on June 18. 

According to the data compiled by the Bank of Korea, outstanding loans extended by such institutions reached 762.29 trillion won (US$672 billion) as of end-April, the highest since related data began in 1993.

It marks a 5.2 percent, or 37.7 trillion won, rise from the end of last year.
Should the current pace continue, this year’s loan growth is expected to surpass last year’s increase of 87.76 trillion won.

Industry watchers said customers were forced to resort to non-banking institutes to buy homes and cover living expenses as banks tightened lending regulations.

Household debt jumped 11.1 percent on-year to 1,359.7 trillion won at the end of the first quarter, slightly lower than the 11.6 percent on-year growth in the fourth quarter of last year and 11.3 percent growth in the third quarter of last year, according to the central bank.

The central bank said earlier the pace of household debt growth had shown signs of “stabilization,” but the growth rate was “still high.” 

The growth of household debt needs to be “closely managed in the future,” the central bank said.

By Ahn Sung-mi and news wires (sahn@heraldcorp.com)