photo = Yonhap News
Banks plan to further raise the threshold for reviewing household loans in the fourth quarter of this year. The government’s tightening of household debt regulations and the expectation that household credit risk would increase due to the increase in the base rate were reflected.
According to the results of the ‘Financial Institutions Loan Behavior Survey’ released by the Bank of Korea on the 18th, the attitude index for household loans including credit loans in banks in the fourth quarter of this year was -32, down 3 points from -29 in the third quarter (-29). If this index (-100 to 100) is negative, it means that there are more financial companies that are willing to strengthen loan screening than those that do not. The survey was conducted between the 15th and 28th of last month, targeting the credit managers of 203 financial companies.
The bank’s household housing loan attitude index was -15, up 20 points from the previous quarter (-35). Although the index showed an upward trend, many banks said they would strengthen the housing loan review as the index was still negative. An official from the BOK said, “The review of household loans by banks will be strengthened in the fourth quarter as in the third quarter due to the government’s move to strengthen household loan management.” Financial Services Commission Chairman Ko Seung-beom met with reporters on the 14th and said, “If it is delayed, we are preparing to announce measures to supplement household debt next week.”
The prospect of higher credit risk also acted as a background to tightening household loans. The bank’s expected 4Q household credit risk index was 18, up 12 points from the third quarter. If this index (-100 to 100) is positive (+), it means that there are more financial companies that answered that the credit risk is high. The prospect that the livelihood of vulnerable households will worsen due to the prolonged COVID-19 was reflected. In addition, it is expected that the increase in loan interest rates in response to the base rate hike will also increase household credit risk.
On the other hand, the threshold for corporate loan screening is expected to be lower. In the fourth quarter of this year, the lending attitude index of banks to large corporations was 3, turning to positive compared to the previous quarter (-9). Small and medium-sized enterprises (3) also turned positive compared to the previous quarter (-3).
In the case of large corporations, the analysis was reflected that the performance, including operating profit, will gradually improve. SMEs are the result of the government’s financial support measures. The government has extended the expiration date of ‘extension of maturity and deferred payment of principal and interest’ for SMEs and small business owners from the end of September to the end of March next year.
By Kim Ik-hwan, staff reporter lovepen@hankyung.com
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