Seoul: Loans extended to companies in South Korea grew at a slower pace in the second quarter compared with the previous quarter on reduced demand from the manufacturing sector, central bank data showed Monday.
According to Yonhap News Agency, outstanding loans to local companies reached 2,065.3 trillion won (US$1.54 trillion) as of end-June, marking an increase of 30.6 trillion won from three months earlier. This represents a slight deceleration from the previous quarter, during which loans expanded by 30.8 trillion won.
By sector, loans to manufacturing firms rose by 8.4 trillion won from three months earlier to 521.5 trillion won. This is a slowdown from the on-quarter increase of 11 trillion won observed in the first quarter. In contrast, loans in the service sector surged by 19.9 trillion won to 1,313.1 trillion won, driven by increased borrowing in the financial and real estate sectors. This represents the largest on-quarter increase since the fourth quarter of 2022, when the figure stood at 26.1 trillion won.
Regarding the purpose of the loans, operating funds increased by 23.8 trillion won in the second quarter, following a 21.4 trillion-won gain in the first quarter. Facility investment loans advanced by 6.9 trillion won, which is a slowdown from a 9.4 trillion-won increase in the previous quarter, according to the BOK data.