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Banks’ lending rate down for 3rd month in February

April 1, 2024

Banks’ loan rate declined for the third straight month in February, as the central bank has frozen its key rate for a year amid still high inflation, data showed Friday.

The average lending rate of banks applied to new loans last month came to 4.85 percent, down 0.19 percentage point from a month earlier, following a 0.1 percentage point fall the previous month, according to the data from the Bank of Korea (BOK).

Last month, the central bank had kept its key rate frozen at 3.5 percent for the ninth straight time.

Household loans continued to grow despite high market rates, rising for the 11th straight month in February, led by rising home-backed loans.

Banks’ lending rate on household loans came to 4.49 percent on average in February, down 0.19 percentage point from a month earlier, according to the BOK.

Their lending rate for corporate loans also slid 0.19 percentage point to 5.03 percent over the cited period, it added.

The rate banks pay for deposits reached 3.63 percent in February, down 0.04 percentage point from the previous month.

The spread on banks’ lending and deposit rates widened to 1.22 percentage points last month from 1.37 percentage points in January, the BOK data showed.

This file photo, taken July 18, 2023, shows information on a bank's loan programs at a lender in Seoul. (Yonhap)
This file photo, taken July 18, 2023, shows information on a bank’s loan programs at a lender in Seoul. (Yonhap)