South Korea’s financial firms expect loan demand to rise in Q1: survey

Credit risks from corporations and households are also expected to rise, however.

South Korea’s domestic banks are expected to ease their lending standards in the first quarter of 2024, according to a survey by the Bank of Korea (BOK).

In a poll conducted from 28 November to 15 December 2023, loan managers from 18 domestic banks and 26 mutual savings banks said that they will ease their lending standards for both corporations and households.

As a result, BOK expects credit risks of both corporations and households to rise during the first three months of 2024.

“Demand for loans at corporations and household mortgage is expected to rise, while demand for other household loans is expected to remain steady,” the BOK added.

On the other hand, non-bank financial institutions– except life insurance companies– said that they will tighten their stances.

Despite these, the lending managers and loan leaders of the 142 mutual credit cooperatives polled expect demand for non-bank loans to rise.

Credit risks at all types of non-bank financial institutions are expected to rise, according to the central bank.