April 19, 2024
Finance
Banks likely to tighten screening for household loans
[THE INVESTOR] Banks in Korea are likely to tighten their rules on household loans in the first quarter of this year, central bank data showed on Jan. 8.
The overall index measuring banks’ “attitude” toward extending loans to households came to minus 13 for the January-March period, compared with minus 17 a quarter earlier, according to data by the Bank of Korea.
A reading below zero means banks will implement tougher screening for household loans, while a reading above zero means eased lending requirements.
The quarterly reading was based on a survey of 15 banks and 184 non-bank lenders between Nov. 24 and Dec. 13.
The BOK said demand for fresh mortgages is likely to fall to minus 30 in the first quarter due to government-led financial regulations aimed at cooling down the overheated housing market.
As of the end of September, the country‘s overall household debt came to more than 1,400 trillion won (US$1.32 trillion).
Separately, indices measuring the credit risks of large firms came to 10 for the January-March quarter, unchanged from the previous quarter. Meanwhile, an index measuring the credit risks of households rose to 27 from 17 during the cited period.
By Alex Lee and newswires (alexlee@heraldcorp.com)
