Banks' household loans rise most in 5 months in May

SEOUL, June 12 (Yonhap) -- Household loans by South Korean banks rose by the largest amount in five months in May on the back of the government's measures to revitalize the sluggish property market, the central bank said Wednesday.

Household loans by local banks, including home-backed and credit loans, reached 465.1 trillion won (US$411.4 billion) as of end-May, up 2.6 trillion won from the previous month, according to the Bank of Korea (BOK).

The May figure marked the largest monthly increase since December of last year when such lending grew 4.9 trillion won.

The BOK said that the rise in banks' household lending came as housing transactions increased on the back of the government's steps to help boost the slumping property market.

Mortgage loans by local banks grew 1.9 trillion won on-month to 316.6 trillion won, also marking the largest monthly gain since December, it added.

Meanwhile, corporate lending by banks slowed in May from April when large firms jacked up lending after paying off their debts at the end of the first quarter, the BOK added.

Corporate loans by local banks gained 3.3 trillion won on-month to 609.2 trillion won in May after growing 5.9 trillion won in April, it added.

The growth of bank lending to small and medium enterprises rose 2.7 trillion won to 459.7 trillion won. But their loans to large firms grew 600 billion won to 149.5 trillion won, compared with a 4.1 trillion won on-month gain in April.

The data came one day before the BOK holds its monthly rate-setting session. Analysts said that the BOK is expected to freeze the key rate at 2.5 percent for June in a bid to gauge the impacts of its rate cut in May on the local economy.

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