S. Korea Banks Poised to Loosen Lending Standard
The lending attitude index climbed to 8 for the January-March period from minus 21 the prior quarter, based on the Bank of Korea (BOK)'s survey of 203 banks and financial entities conducted between Nov. 25 and Dec. 16 last year.
The metric rose into positive territory for the first time in four quarters, signaling that institutions prepared to loosen loan criteria now outnumber those planning to tighten restrictions.
President Lee Jae Myung's government introduced measures during 2025's second half aimed at controlling surging household debt, particularly home mortgages.
The lending attitude index for household mortgage loans surged to 6 in the first quarter from minus 44 previously, while the metric for alternative household lending, including credit loans, expanded from minus 25 to zero.
The indicator for large corporations rose from 3 to 6 during the referenced timeframe, while the small business index climbed from minus 3 to 11.
The BOK maintained its key interest rate steady at 2.50 percent following 25 basis point reductions in February and May 2025, plus October and November 2024.
The credit risk index for households escalated 3 points to 14 in the first quarter versus the preceding quarter.
The measure for large enterprises jumped 6 points to 14, though the small firm figure declined 3 points to 28.
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