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LENDING & CREDIT | Cesar Tordesillas, Korea

Korea's foreign banks see increased overseas borrowing

Foreign bank branches in South Korea have increased their overseas borrowing so far this year.

The combined foreign exchange borrowing by bank branches rose 9.8 percent, or US$6.6 billion, from the end of 2011, according to the Financial Supervisory Service.

Of the total, money borrowed by bank branches on the market rose $4.3 billion, while those brought in from the lender's main office moved up $2.3 billion, it said.

The latest findings showed overseas borrowing by European bank branches in the country going up by $500 million in the five month period, with numbers for U.S. and Asian lenders gaining $3.1 billion and $2.1 billion, respectively.

"The increase is a sign that foreign banks think South Korea's economy is relatively safe from fallout caused by persistent eurozone woes and sluggish growth in the United States and China," a FSS official said.

Increased overseas borrowing by foreign banks indicates they are making are making money in the country through commercial loans, forward exchanges, swaps and other financial transactions, he added.

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