South Korean banks are set to ease lending standard for small companies and households in the second quarter as the government unveiled measures to offer financial support amid the COVID-19 outbreak, central bank data showed Tuesday.
The lending attitude index for small firms stood at 20 for the April-June quarter, staying in positive territory for the sixth consecutive quarter, according to the Bank of Korea (BOK).
The index gauges banks’ attitude toward an expanded loan to companies and households. The reading above zero indicates banks planning to expand loan or ease lending standard.
The figure for credit loan to households increased from 10 in the first quarter to 13 in the second quarter.
It came as the government unveiled a stimulus package to financially support small firms and microbusiness owners that have been hit hard by the coronavirus outbreak.
Consumers refrained from shopping, traveling and eating-out and avoided social gatherings and religious services, resulting in the weakening of the domestic demand.
The lending attitude index for mortgage loans came in at minus 7 for the second quarter as the government sought to curb speculative investment in the real estate market amid the record-low borrowing cost.
The BOK slashed its benchmark interest rate by half a percentage point in March to an all-time low of 0.75 percent in its first emergency move since the 2008 global financial crisis.
Credit risks are forecast to rise in the second quarter both for households and companies amid growing economic uncertainty caused by the COVID-19 outbreak.
The credit risk index for households gained from 7 in the first quarter to 27 in the second quarter, while the reading for small companies almost tripled to 50 in the second quarter.
Source: Xinhua |
