Home-backed bank loans grow at record pace in 2015

Home-backed bank loans grow at record pace in 2015

Home-backed loans from South Korean banks grew at the fastest clip in five years in 2015 due mainly to a surge in demand for homes and unrelenting rental fees, the financial watchdog said Thursday.

Outstanding home-backed loans extended by local banks in December totaled 6.2 trillion won, bringing the total amount of fresh mortgage loans in 2015 to 70.6 trillion won (US$58.32 billion), according to the Financial Supervisory Service (FSS).

The growth in 2015 is the fastest rate of increase in mortgage loans since 2011, and more than doubled the 37.2 trillion-won growth logged in 2014, according to the FSS.

As of end-December, the total amount of home-backed loans reached 476.6 trillion won.

The outstanding amount of won-denominated loans extended to households came to 562.8 trillion won as of the end of last year, up 7.3 billion won in December, while corporate loans fell 10.7 trillion won to 755.9 trillion won, according to the watchdog.

Combined, the won-denominated amount of bank loans stood at 1,352.9 trillion won as of end-December, up 900 billion won, or 0.1 percent, from the previous month.

Meanwhile, the delinquency rate for loans fell to a record low in 2015 as banks wrote off overdue bonds worth 3.7 trillion won heading into the new year, the watchdog said. Loans with both the principal and interest overdue by one month or more are considered delinquent.

The average delinquency rate for bank loans stood at 0.58 percent as of the end of December, down 0.16 percentage points from the previous month and 0.06 percentage points from a year earlier.

The overall overdue rate of corporate loans fell 0.21 percentage points on-month to 0.78 percent in December, and the delinquency rate for household loans stood at 0.33 percent, down 0.09 percentage points from a month earlier, according to the FSS. (Yonhap)

Source:http://www.koreaherald.com/view.php?ud=20160128000521

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