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South Korea's Q2 household debt growth slowest in almost 2 years
[SEOUL] South Korea's household credit grew at its slowest pace in the second quarter due to tighter lending rules, while mortgages continued to grow solidly, the central bank said on Wednesday.
Household debt during the June quarter of this year, including loans and other debt owed by South Korean households rose 10.4 per cent from a year earlier to 1,388.3 trillion won (S$1.68 trillion), preliminary data from the Bank of Korea showed.
It was lower than the second quarter's 11.1 per cent increase and marked the slowest growth since a 10.4 per cent rise in the third quarter of 2015.
The slower credit growth comes after the Bank of Korea instructed financial institutions to tighten their lending criteria in March amid concerns over high household debt.
Mortgages and other loans at depository institutions rose 12.0 trillion won to 935.3 trillion won, while borrowings from non-depository institutions increased by 6.3 trillion, less than the 7.4 trillion won rise in the March quarter.
The outstanding amount of purchases on credit jumped 13.6 per cent in the second quarter year-on-year, faster than the 12.0 per cent expansion, driven up by expansion in retail stores and automobile outlets.