South Korean banks will likely ease their regulations on fresh loans for households and small businesses in the third quarter but tighten rules on home-backed loans amid government efforts to curb real estate speculation, a central bank poll showed July 4.
The index measuring the banks’ overall attitude toward fresh loans came to 7 for the July-September period, compared with zero for the second quarter.
A reading above zero means banks will ease their screening for fresh loans, while a reading below the benchmark means they will likely tighten lending requirements.
The quarterly survey was conducted from May 27-June 14, involving 199 financial institutions here, including 184 nonbank lenders, such as credit card companies.
The attitude of nonbank lenders toward fresh loans worsened to minus 7 for the third quarter from minus 4 for the second quarter.
The overall attitude of local banks on loans to large conglomerates remained unchanged or “neutral” at zero for the third quarter, the BOK said, while their attitude toward loans to small and medium-sized firms slightly deteriorated to 17 from 23 in the second quarter.
The banks’ attitude toward home-backed loans remained unchanged at minus 7, but the index for other household loans rose from zero to 7.
By Ram Garikipati and newswires (email@example.com)