South Korean banks'lending rate jumped last month as mortgage loans with low rates reduced following the closure of tax exemption for real estate acquisition tax, the central bank said Monday.
The weighted average annual rate for new loans extended by local banks to households and companies stood at 5.79 percent in January, up 10 basis points (bps) from a month earlier, according to the Bank of Korea (BOK).
The rebound came as home-backed lending with low interest rates decreased sharply last month following the end of tax exemption for housing acquisition tax, according to the BOK. The rate for household loans dropped 43 bps on-month 5.80 percent in January, while the one for loans to companies edged up 2 bps to 5. 83 percent.
Meanwhile, the average annual rate on bank deposits came in at 3.75 percent in January, down 2 bps from the previous month, according to the BOK.
The deposit rate fall was mainly attributed to a drop in interest rates for market-type financial products such as certificate of deposits, the rate of which dipped by 5 bps last month from a month before.
South Korean lenders'loan-to-deposit spread, a gauge of banks' profitability from lending, came to 2.04 percent in January, up 12 bps from the previous month, the BOK said. |