South Korean banks to ease lending criteria in Q2: report

The incoming new president had emphasized need to ease lending rules.

Banks in South Korea will ease their lending criteria for households and companies in the second quarter, according to a poll conducted by the Bank of Korea (BOK), ahead of a change in presidency.

An index gauging 18 local banks’ attitudes towards home-backed and unsecured lending to households stood at 11 and 3, respectively, for the April to June period, reports Yonhap. In comparison, the figures stood at minus 14 and minus 17 a month earlier.

Another index measuring banks' lending policy for large and small companies came in at 6 each for the second quarter, up from zero three months earlier, with a reading below zero meaning that the number of lenders that will restrict lending surpasses that of banks planning to ease lending criteria.

Earlier, the BOK had said that demand for fresh loans from households will likely rise as banks are poised to ease curbs on lending. 

Demand for corporate loans is also expected to tick up as companies want to secure additional liquidity amid heightening uncertainty at home and abroad, the financial regulator added.

The results come at the back of the incoming government of President-elect Yoon Suk-yeol, who will take office on May 10. Yoon has emphasized the need to ease lending rules, which had been tightened under the incumbent Moon Jae-in administration in an attempt to keep a lid on fast-growing household debt.