Household debt extended by banks in South Korea continued to increase at a steady pace in November, while fresh bank deposits spiked at the highest level in nearly five years amid lack of viable places to park their money, central bank data showed Wednesday.
Fresh bank loans extended to households came to 7 trillion won ($5.9 billion) in the month, slightly slowing from a 7.2 trillion-won increase the month before, according to the data from the Bank of Korea.
Outstanding home-backed loans added 4.9 trillion won to an outstanding 648 trillion won, with other bank loans to households gaining 2.1 trillion won to 231.9 trillion won.
(Yonhap)
"The increase in home-backed loans continued to accelerate from 4.6 trillion won (in October) to 4.9 trillion won due to steady demand for funds for home purchases and rentals," the BOK said.
Bank loans to companies also continued to grow from a month earlier in November but also at a reduced rate.
Outstanding corporate loans came to 875.2 trillion won as of end-November, up 5.9 trillion won from a month earlier when corporate loans gained 7.5 trillion won.
Bank deposits, on the other hand, skyrocketed, surging 30.3 trillion won from a month earlier in November, the highest amount since December 2014, when bank deposits added 52.2 trillion won, according to the BOK.
"Bank deposits increased despite an outflow of local government funds, partly because of banks' efforts to attract more deposits in preparation for the new loan-deposit ratio," it said.
However, the increase in savings also comes as there are no viable investment destinations amid a slump in the local stock market.
Foreigners net sold over 5 trillion won worth of local stocks in 21 consecutive sessions between Nov. 7-Dec. 5, their longest selling streak since January 2013.
Amid apparently worsened investor sentiment, fresh funds funneled to asset management companies came to 9.6 trillion won in November, sharply slowing from a 17.2 trillion-won increase the previous month, according to the BOK. (Yonhap)
