ID :
19960
Wed, 09/17/2008 - 11:30
Auther :
Shortlink :
http://m.oananews.org//node/19960
The shortlink copeid
Growth of S. Korean individual debt hits over 1-year high in Q2
SEOUL, Sept. 17 (Yonhap) -- South Korean individuals' debt grew at the fastest pace in more than one year in the second quarter as household debt increased on the back of higher home-backed lending, the central bank said Wednesday.
As of the end of June, debts of South Korean individuals including households and
non-profit private organizations reached 780.7 trillion won (US$689 billion), up
3.1 percent from three months earlier, according to a preliminary report by the
Bank of Korea (BOK).
They accelerated from a 2.4 percent gain in the first quarter and marked the
fastest increase since the fourth quarter of 2006 when such debt increased 4.4
percent.
"The debt growth of individuals picked up as financial institutions further
extended home-backed loans and lending on credit to households," Kim
Tae-suk, head of flow of funds team at the BOK, told reporters.
The report came as South Korea's household credit rose to a record high of 660.3
trillion won in the second quarter, up 10.7 percent from a year earlier,
according to a BOK report released in early September.
Rising debts, together with skyrocketing inflation, are sapping household and
corporate spending, denting domestic demand. Experts said a recent rate hike by
the central bank is feared to increase debt burdens on households and smaller
firms.
The ratio of financial assets held by individuals to debt came in at 2.22 percent
as of end-June, down from 2.26 percent three months earlier as debt growth
accelerated more than asset growth.
"The ratio itself is at a similar level posted in the end of 2002 when a
credit card bubble burst in South Korea," Kim said. "But I think the
quality of debt is different...Following the 1997 Asian financial crisis and the
credit card turmoil, local financial institutions have beefed up their risk
management."
Meanwhile, corporate debts increased 5.52 percent on-quarter to outstanding 1,048
trillion won at the end of June as companies borrowed money to fund working
capital amid rising raw material costs and to cover takeovers, the BOK said.
sooyeon@yna.co.kr
(END)
As of the end of June, debts of South Korean individuals including households and
non-profit private organizations reached 780.7 trillion won (US$689 billion), up
3.1 percent from three months earlier, according to a preliminary report by the
Bank of Korea (BOK).
They accelerated from a 2.4 percent gain in the first quarter and marked the
fastest increase since the fourth quarter of 2006 when such debt increased 4.4
percent.
"The debt growth of individuals picked up as financial institutions further
extended home-backed loans and lending on credit to households," Kim
Tae-suk, head of flow of funds team at the BOK, told reporters.
The report came as South Korea's household credit rose to a record high of 660.3
trillion won in the second quarter, up 10.7 percent from a year earlier,
according to a BOK report released in early September.
Rising debts, together with skyrocketing inflation, are sapping household and
corporate spending, denting domestic demand. Experts said a recent rate hike by
the central bank is feared to increase debt burdens on households and smaller
firms.
The ratio of financial assets held by individuals to debt came in at 2.22 percent
as of end-June, down from 2.26 percent three months earlier as debt growth
accelerated more than asset growth.
"The ratio itself is at a similar level posted in the end of 2002 when a
credit card bubble burst in South Korea," Kim said. "But I think the
quality of debt is different...Following the 1997 Asian financial crisis and the
credit card turmoil, local financial institutions have beefed up their risk
management."
Meanwhile, corporate debts increased 5.52 percent on-quarter to outstanding 1,048
trillion won at the end of June as companies borrowed money to fund working
capital amid rising raw material costs and to cover takeovers, the BOK said.
sooyeon@yna.co.kr
(END)
