SEOUL: Household loans among South Korean banks surged in March amid record-low interest rates and a recovering housing market, financial watchdog data showed Monday.Outstanding loans extended by banks amounted to 1,278.3 trillion won (1.18 trillion U.S. dollars) as of end-March, up 4.6 trillion won, or 0.4 percent, from a month earlier, according to the Financial Supervisory Service (FSS).
Among them, household loans reached 526.1 trillion won as of end-March, up 4 trillion won from a month earlier.The 4-trillion-won increase was the largest gain in the month since the FSS began compiling the data in 2006.
The sharp rise was attributable to record-low interest rates caused by the Bank of Korea (BOK)’s policy rate cut to an all-time low of 1.75 percent in March.Housing market recovered amid the low interest rates. The number of apartment transactions in Seoul was 13,100 in March, up from 8,600 in February.
Bank loans to large corporations were 183.3 trillion won at the end of March, down 4.2 trillion won from the prior month. Loans to small enterprises rose 5.8 trillion won from a month ago to 537.5 trillion won in March.
Delinquency ratio for bank loans was 0.69 percent as of end- March, down 0.08 percentage points from the previous month. It was down 0.16 percentage points from a year earlier.Resolved delinquent debts were 2.5 trillion won in March, surpassing new bad debts that reached 1.4 trillion won in the month.
The bad debt ratio for household loans declined 0.09 percentage points from a month earlier to 0.48 percent as of the end of March, and the ratio for corporate loans slid 0.08 percentage points to 0. 86 percent.
