SEOUL Aug 26 South Korea's annual household
credit growth eased slightly during the April-June period,
central bank data showed on Tuesday, but the underlying growth
rate remained resilient in the face of a maritime disaster in
April that dented private consumption.
Household credit during the June quarter, including loans
and other credit owed by South Korean households, was up 6.2
percent on-year, or 15.1 trillion won, to 1,040.0 trillion won
(1.02 trillion US dollar), the Bank of Korea's preliminary data
This was slightly slower than a 6.4 percent gain seen in the
first quarter, when credit grew at the fastest clip in two
The increase was led by household loans owed to financial
institutions, which rose 6.1 percent in the second quarter of
the year from a year ago to 982.5 trillion won.
"Most believed the Sewol ferry sinking would have dragged
down credit growth, but we saw loans grow in the second quarter
as this period is usually the peak moving season," said a
central bank official.
The capsizing of the Sewol ferry in mid-April killed more
than 300 passengers and cast a pall of gloom on the domestic
tourism industry. The resulting hit to consumption dragged down
second quarter growth to its slowest in more than a year.
The central bank data also attributed the rise in loans to
banks increasing efforts to attract clients to borrow more at
fixed interest rates.
This is part of a government attempt to push households
towards structurally sound loans, as the country's financial
regulator said in February fixed-rate and amortising home loans
must each account for 40 percent of banks' residential mortgage
holdings by 2017.
Purchases on credit, including credit card transactions
gained 7.9 percent on a yearly basis to 57.5 trillion won, the
central bank's quarterly data showed.
Most analysts see credit continuing to grow in the third
quarter as government measures aimed at boosting activity in
South Korea's housing market were launched in August on top of a
widely expected rate cut, which was delivered earlier this
(1 US dollar = 1,018.0000 Korean won)
(Reporting by Christine Kim; Editing by Shri Navaratnam)