Housing loans dominate bank lending

SEOUL, November 13 (AJP) - Bank lending remains heavily concentrated in real estate, while funding for corporate investment is losing momentum. According to financial sources on Friday, housing-related loans at five major banks reached 623.03 trillion won (US$466 billion) at the end of October, up 1.9 percent from December last year, while loans to real estate and leasing businesses rose 3.4 percent year-on-year to 223.19 trillion won at the end of June, accounting for about 26 percent of corporate lending.

Meanwhile, facility loans for equipment investment grew by just 6.9 trillion won in the second quarter, down from 9.4 trillion won in the previous quarter. Financial authorities are seeking to redirect credit toward productive sectors by easing bank capital requirements, but analysts say better screening of innovative companies and stronger risk-sharing mechanisms are also needed to support business investment.

Tags: bank, lending, loans, hosing, investment

Lee Seong-jin

Housing loans dominate bank lending

Related News