SEOUL (Xinhua) – Bank loans to households in South Korea kept rising at a rapid pace on the back of the record-low interest rate, central bank data showed yesterday.
Loans extended by banks to households reached 744.2 trillion won (659.3 billion US dollars) as of end-August, up 6.5 trillion won from a month earlier, according to the Bank of Korea (BOK).
It marked the second-biggest monthly growth this year as the BOK froze its policy rate at an all-time low of 1.25 per cent since June last year.
Mortgage loan growth slowed down as the government unveiled a set of measures last month to control speculative investment in the real estate market.
Home-backed debts owed by households to banks came in at 557.7 trillion won at the end of August, up 3.1 trillion won from a month earlier. It was down from rises of 4.8 trillion won in July and 6.1 trillion won in August last year.
Other bank loans to households, including credit loans and loans with stocks and deposits in collateral, jumped 3.4 trillion won over the month to 185.7 trillion won as of end-August.
It marked the biggest monthly increase since the bank began to compile the data in January 2008.
Amid the tightened standard for mortgage loans, households rushed to borrow credit loans of the record-low costs.
The launch in late July of the country’s second Internet-only bank, Kakao Bank, also contributed to the rapid growth in credit loans.
Loans extended by Kakao Bank, set up by Kakao Corp, the operator of South Korea’s most-used mobile messenger Kakao Talk, reached a whopping 1.4 trillion won for one month since its launch.