2022 Financial Sector Loan Attitude Outlook
[Asia Economy Reporter Seo So-jeong] The threshold for household bank loans is expected to lower in the second quarter of this year. Additionally, as authorities extend financial support measures, loans to small and medium-sized enterprises (SMEs) are also expected to increase.
According to the "Financial Institution Lending Behavior Survey Results" announced on the 11th by the Bank of Korea, which surveyed a total of 204 financial institutions including 18 domestic banks and 26 mutual savings banks, the lending attitude of domestic banks toward households in the second quarter was rated at 6. This is 15 points higher than the -9 recorded in the previous quarter. A negative value indicates a higher lending threshold by financial companies.
A Bank of Korea official stated, "The lending attitude toward households has been continuously tightened in line with household loan management policies, but recently, with the slowdown in household loan growth and expected adjustments to household loan regulations, it is anticipated to ease."
Looking at the lending attitude index by borrower type at domestic banks, household mortgage loans scored 11, jumping 25 points from -14 in the first quarter, and general household loans rose 20 points to 3. Both large corporations and SMEs increased by 6 points each, from 0 in the first quarter to 6.
The Bank of Korea said, "The lending attitude of domestic banks toward companies is expected to ease for both large corporations and SMEs," adding, "For SMEs, lending attitudes remained steady ahead of the end of financial support measures in the second half of last year, but with the announcement of additional extension plans, easing is expected in the second quarter."
The credit risk index anticipated by banks for the second quarter was 13, 1 point higher than 12 in the first quarter.
Looking at the credit risk index by borrower type at domestic banks, the household index fell 3 points from the first quarter to 14. The credit risk indices for large corporations and SMEs were 8 and 19 respectively, rising 2 points and 5 points from the first quarter.
The Bank of Korea explained, "Corporate credit risk in the second quarter is expected to expand mainly among SMEs due to continued uncertainties in domestic and international economic conditions and deteriorating debt repayment ability of some vulnerable industries and small self-employed businesses," adding, "Household credit risk is also expected to increase due to factors such as rising loan interest rates."
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