Household loan growth hits 6-year high in S. Korea

South Korean banks' household loans grew at the fastest pace in six years in December.

More people were seen taking out mortgage loans ahead of the end of the government's temporary housing tax benefits, the central bank said Thursday.

Local banks' household loans, including home-backed and credit loans, amounted to 466.5 trillion won or US$439.4 billion as of end-December, up 4.9 trillion won from the previous month, according to the Bank of Korea.

The December data compared with a 1.1 trillion won gain tallied in November and marked the largest monthly rise

since a 5 trillion won advance in December 2006, it added.
In December, bank mortgage lending grew 5 trillion won on-month to 316.9 trillion won, the largest monthly gain

since a 5.7 trillion won rise in September 2002.

If mortgage loans transferred to the state-run Korea Housing Finance Corp. are taken into account, the December household loans expanded by 5.6 trillion won, the largest monthly gain since 6.9 trillion won in November 2006.

The government unveiled a set of measures in September to boost the sagging property market, including tax cuts of housing purchases.

Meanwhile, banks' corporate lending declined last month as local firms repaid bank loans to make the balance sheet look better and lenders disposed of bad debts at the end-year, the BOK said.

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