South Korean banks’ household loans rose for the second straight month in April on the back of the government’s measures to revitalize the sluggish property market, the central bank said Wednesday.

Local banks’ household loans, including home-backed and credit loans, reached 462.5 trillion won ($425.6 billion) as of the end of April, up 924.9 billion won from the previous month, according to the Bank of Korea.

Banks’ home loans grew by less than 1 trillion won for the second straight month in April. But if mortgage loans transferred to the state-run Korea Housing Finance Corp. are taken into account, banks’ household lending rose 4.2 trillion won last month, the largest since a 5.6 trillion won gain in December last year.

The BOK said that the rise in banks’ household lending came as housing transactions increased on the back of the government’s measures to revitalize the slumping property market unveiled on April 1.

The measures included tax breaks for first-time homeowners and a cut in the supply of new homes to prevent housing prices from falling further.

Meanwhile, banks’ corporate lending expanded last month mainly because their lending to larger companies picked up on a seasonal factor, the BOK said.

Corporate loans by local banks gained 5.9 trillion won on-month to 605.8 trillion won after growing 3 trillion won in March, it added.

The growth of bank lending to small and medium enterprises slowed to 1.9 trillion won last month from 2.9 trillion won in March. But their loans to larger firms grew 4.1 trillion won on-month to 148.9 trillion won.

The data came one day before the BOK holds its monthly rate-setting session. Market players are almost evenly divided over whether the BOK will cut the key rate, but more experts said that the bank will likely freeze the benchmark rate for the seventh straight month. (Yonhap News)