Local banks are likely to take measures to cut household lending, however, industry sources said.“More people are seeking to raise money through credit loans within their limits as the tougher stressed DSR rules and industry’s measures reined mortgages and lending for leases,” said an executive vice president for the loan business at another local bank.“It will be difficult to avoid the balloon effect of lending unless we come up with additional steps.”As banks raised the bar for lending, loan seekers rushed to other financial service providers such as insurers.
The balance of mortgages of KB Kookimn and Shinhan fell as the country’s two largest banks took measures to cut such lending.“It is necessary to closely monitor the credit loan growth, given the sustained lending demand, although the country introduced a tougher stressed DSR,” said an executive vice president at a local bank.
The differential of credit loan increases between KB Kookmin and Woori was only about 10 billion won last month.“Loan demand may have moved to other banks including Woori as Kookmin sharply lowered the limits of overdraft accounts, which office workers usually use,” said a Woori official when asked about its credit loan growth.
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