S. Korean individual debt growth slows in Q3

SEOUL, Dec. 12 (Yonhap) -- South Korean individuals' debt grew at a slower pace in the third quarter from three months earlier as local financial firms extended fewer loans amid the slowing economy, the central bank said Friday.
As of the end of September, individual debt including households and non-profit
private organizations reached 796.9 trillion won (US$589.6 billion), up 2.1
percent from the previous quarter, according to a preliminary report by the Bank
of Korea (BOK).
The third-quarter gain is lower than the 3.1 percent gain in the second quarter,
when the growth of individual debt hit an over one-year high, the BOK said.
"South Korean individual debt growth slowed down in the third quarter as loan
growth by financial institutions eased and individuals' investment in stocks
fell," an official at the BOK said.
The report came as South Korean lenders have been increasingly reluctant to
extend loans, particularly to smaller companies, to strengthen their risk
management amid the slowing economy and a credit crunch.
Liquidity provided by the financial sector to individuals and companies fell.
Funds extended to individuals reached 15.2 trillion won in the third quarter,
compared with a 22.3 trillion won expansion the previous quarter. Liquidity
provided by financial firms to the corporate sector amounted to 41.7 trillion won
from 51 trillion won, the BOK said.
The ratio of individually held financial assets to debt came in at 2.15 as of
end-September, down from 2.22 three months earlier as financial assets declined
with the slumping stock market raising valuation losses for individual stock
investments, the BOK said.
Meanwhile, corporate debts increased 5.4 percent on-quarter to an outstanding
1,104.5 trillion won at the end of September, it added.
sooyeon@yna.co.kr
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