Banks in South Korea are likely to tighten their rules on household loans in the first quarter of this year amid a recent trend of rising interest rates, central bank data showed Monday.
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 (BOK).
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 nonbank lenders between Nov. 24 and Dec. 13.
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(Yonhap) |
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.
Last year, the government announced a set of measures, including designating 25 "overheated speculative" districts and reducing the loan-to-value and debt-to-income ratios for home purchases in such speculative regions, as part of its efforts to tackle the country's growing household debt.
Also, the central bank raised the base rate by a quarter percentage point to 1.5 percent in November, marking the first rate hike action in nearly 6 1/2 years.
As of the end of September, the country's overall household debt came to more than 1,400 trillion won ($1.32 trillion).
The BOK data also showed that local lenders' attitude toward fresh loans to big firms dropped to zero in the first quarter, while the attitude toward small and mid-sized companies worsened to minus seven from three over the three-month period.
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. (Yonhap)
