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bank lending-February tally

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(Globalpost/GlobalPost)

SEOUL, March 13 (Yonhap) -- South Korean banks' household loans declined for the second straight month in February, but they fell at a slower pace than the previous month on a seasonal factor, the central bank said Wednesday.

Local banks' household loans, including home-backed and credit loans, amounted to 461.5 trillion won (US$421 billion) as of end-February, down 1.6 trillion won from the previous month, according to the Bank of Korea (BOK).

In January, such lending fell by the largest-ever amount as the expiration of temporary housing tax cuts squeezed loan demand, the bank said.

The BOK said that banks' household lending fell at a slower pace last month than in January as loan demand revived to cover moving into new houses ahead of the start of the school year.

The temporary tax cuts for housing purchases, aimed at boosting the sagging property market, expired at the end of last year, sapping loan demand for mortgage loans.

In February, banks' mortgage lending fell 800 billion won on-month to 313.9 trillion won after declining 2.3 trillion won in January, it added.

But if mortgage loans transferred to the state-run Korea Housing Finance Corp. are taken into account, home-backed lending expanded 2.1 trillion won.

Meanwhile, banks' corporate lending grew at a slower pace in February as smaller firms borrowed more from banks in January on a seasonal factor, the BOK said.

Corporate loans by local banks gained 3.2 trillion won on-month to 596.9 trillion won after growing 4.7 trillion won in January.

Banks' lending to small and medium enterprises (SMEs) grew at a faster pace than loans to larger companies as local banks were seen as staying in line with the government's pledge to support smaller firms.

Banks' lending to SMEs rose 2.3 trillion won to 452.2 trillion won after growing 3.1 trillion won in January, it added.

The data came one day before the BOK holds its monthly rate-setting session. Analysts said the BOK is likely to freeze the key interest rate at 2.75 percent for the fifth straight month.

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