South Korea’s bank loans fall by $834m in September: report

The rise in banks’ lending rates contributed to the fall.

South Korean banks’ outstanding loans totalled $743.7b (KRW1,059.5t) in September, over $834.9m (KRW1.2t) lower from August, reports Yonhap, according to data released by the Bank of Korea (BOK).

Household loans extended by banks and other financial institutions were also down $904.5m (KRW1.3t) over the same period.

September's downturn came as bank's lending rates rose in tandem with the BOK's sharp policy rate hikes aimed at bringing soaring inflation down, Yonhap said in a report.

Since August 2021, the BOK has hiked its benchmark rate eight times to a combined 2.5 percentage points. 

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Home-backed loans extended by banks grew KRW900b to KRW793.5t in September, slower than the KRW1.6t rise recorded in end-August.

Banks' unsecured and other types of loans also declined KRW2.1t to KRW264.7t, official data showed.

In contrast, corporate loans totalled KRW1,155.5t in end-September, KRW9.4t higher than in August.