Household loans extended by South Korean banks declined in January as households' balance sheets improved on the back of year-end bonuses, and mortgage lending also fell, the central bank said Wednesday.
Outstanding household loans by local banks, including home-backed and credit loans, reached 477.8 trillion won ($448 billion) as of end-January, down 2.6 trillion won from the previous month, according to the Bank of Korea.
The January figure also compares with the 2.9-trillion-won growth in December, the data showed.
Banks' mortgage loans also declined 0.8 trillion won on-month to 327.4 trillion won in January, compared with a 2.8 trillion won on-month gain in December. The decline came as tax benefits for home purchases ended in December, the central bank said.
Corporate lending, in contrast, sharply increased as local firms borrowed more money to pay taxes and cover other costs, the BOK said.
Banks' corporate loans increased 10.9 trillion won last month to 634.7 trillion won, a sharp turnaround from a 12.7 trillion won on-month decline in December, it said. Local companies repay debts to dress up their balance sheets ahead of the end of the year.
Bank lending to larger companies jumped 6.4 trillion won to 156.8 trillion won with that to smaller companies also rising 4.5 trillion won to 477.9 trillion won, the central bank said.
The data came one day before the BOK's monthly rate-setting session. Analysts said that the BOK is expected to freeze the key rate at 2.5 percent for the ninth consecutive month this month as signs of the economic recovery are growing amid low inflation. (Yonhap)