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Korean banks to ease lending standards for companies and mortgages

But banks are expected to tighten lending standards for household loans.

South Korea’s domestic banks are expected to ease their lending standards on corporate loans and on household mortgages during the second quarter of 2024.

In a survey by the Bank of Korea (BOK)—which involved 18 domestic banks and 26 mutual savings banks (MSBs)— found that banks are more likely to ease lending standards to large corporations, small and medium enterprises (SMEs), and household mortgage loans.

Banks particularly indicated a strong likelihood of easing lending standards for household mortgages. 

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However, they are expected to tighten lending standards for other household loans.

“Demand for loans is expected to rise at all non-bank financial institutions, except at mutual credit cooperatives,” BOK said in a press release.

Non-bank financial institutions (NBFIs), meanwhile, are expected to tighten their stances. This comes as demand for loans is expected to rise for all NBFIs, except for mutual credit cooperatives.

The survey was conducted between March 7-18, involving a total of 204 financial institutions. Apart from 18 domestic banks and 26 MSBs, BOK also surveyed 142 mutual credit cooperatives (MCCs), 8 credit card companies, and 10 life insurance companies.

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