S.Korean banks to ease lending standard in Q2

South Korean banks planned to ease lending standards in the second quarter as higher borrowing cost slowed the growth pace of household loans, central bank poll showed Monday.

The lending attitude index stood at 6 for the April-June quarter, up 15 points from the previous quarter, according to the Bank of Korea (BOK) survey of 204 financial institutions, including banks and other lenders, conducted from March 15 to March 31.

The reading above zero indicates that lenders, who are willing to moderate loan standards, outnumber those willing to tighten them.

The eased lending standards were attributed to the slower household debt expansion, caused by higher benchmark interest rate.

The BOK raised its policy rate by a quarter percentage point to 1.25 percent in January, after lifting it by 25 basis points in August and November each last year.

The lending attitude index for mortgage loan to households spiked 25 points from three months earlier to 11 for the second quarter, and the index for credit loan to households soared 20 points to 3.

The credit risk index added 1 point to 13 in the cited quarter, and the lending demand index advanced 19 points to 3.