South Korean bans' lending rates dropped in July to 5.45 percent as overall market rates slid after Bank of Korea (BOK) cut its policy rate, a report by the central bank showed Tuesday.

The weighted average annual rate for new loans extended by local banks to households and companies came in at 5.45 percent in July, down 13 basis points (bps) from a month earlier, according to the BOK.

The July decline came as overall market interest rates fell after the central bank lowered its policy rate by 25 bps to 3 percent, the first cut in more than three years.

The rate for household loans tumbled 18 bps on-month 5.20 percent in July, with the rate for corporate loans declining 14 bps to 5.53 percent.

The average annual rate on bank deposits came to 3.43 percent in July, down 20 bps from a month before, according to the BOK.

The rate for market-type financial products such as certificate of deposits (CDs) plunged 19 bps on-month 3.41 percent in July, with the one for savings deposits dropping 20 bps to 3.43 percent.

South Korean lenders' loan-to-deposit spread, a gauge of banks' profitability from lending, stood at 278 bps in July, down 6 bps from the previous month.