Growth of insurance firms' lending slows in Q3

South Korean insurance companies saw their lending grow at a slower pace in the third quarter from three months earlier due to tougher rules on household loans, data showed Monday.

Insurers' outstanding loans totaled 262.4 trillion won ($222 billion) as of the end of September, up 2.1 trillion won from the prior quarter, according to the data from the Financial Supervisory Service (FSS).

Yet the figure was down from the on-quarter increase of 5.2 trillion won in the previous quarter. From a year ago, it was up 2.8 trillion won.

The slowdown came amid stricter rules for loans to households, which are aimed at curbing the country's growing household debt.

Household lending expanded by 1.1 trillion won to 127.7 trillion won as of end-September, mostly from loans collateralized by insurance premiums.

Their corporate loans stood at 134.5 trillion won, up 1.1 trillion won from three months earlier.

The loan delinquency rate, which measures the proportion of loan principal or interest unpaid for at least a month, came to 0.14 percent, down 0.03 percentage point from the second quarter.

The figure for household loans remained unchanged at 0.29 percent, while that for corporate lending declined 0.03 percentage point to 0.07 percent point.

The ratio of insurers' nonperforming loans amounted to 0.12 percent as of end-September, down 0.12 percentage point from three months earlier.

The FSS said it will keep close tabs on insurers' lending and make efforts to get them to put up sufficient loan-loss reserves amid the coronavirus pandemic. (Yonhap)