South Korean Banks to Soften Loan Extension Policies in Q1 Due to Mortgage Refinancing DemandPOSCO International Records 12.5% Rise in Net Profit for 2023

SEOUL — In the first quarter of the year, banks in South Korea are anticipated to relax their policies on extending loans, influenced by the demand for mortgage refinancing programs. This outlook is based on a survey released on Tuesday by the central bank.

According to Yonhap News Agency, which involved 18 banks, the index measuring banks' willingness to lend to households and businesses stood at 5 for the January-March period. This marks a significant shift from the previous quarter's minus 6 and minus 2 in the third quarter of last year. An index reading above zero indicates that more lenders are likely to ease lending practices than those planning to tighten them.

The BOK explained that this change in lending attitude is primarily driven by an expected increase in demand for home-backed loan refinancing. Since the beginning of the month, banks have introduced various mortgage refinancing programs aimed at reducing financial burdens for borrowers.

However, the survey also highlighted that credit risks for borrowers in the first quarter are expected to remain high. This ongoing risk is attributed to the increasing debt burden, exacerbated by high borrowing costs. These costs have been influenced by the BOK's rate hikes, implemented as a measure to control inflation. The index assessing credit risks for households and businesses remained stable at 31, identical to the previous quarter's figure.

Earlier this month, the BOK maintained its key rate at 3.5 percent for the eighth consecutive session. This decision reflects concerns over a fragile economic recovery and a slower-than-expected moderation in inflation. However, the BOK hinted at a potential shift away from its restrictive stance. This freeze on the key rate follows seven consecutive rate hikes from April 2022 to January 2023 and continues the trend of rate freezes initiated in February and repeated in subsequent months including April, May, July, August, October, and November.

SEOUL — POSCO International Corp., a subsidiary of South Korean steel conglomerate POSCO Holdings Co., specializing in general trading and energy, announced a 12.5 percent increase in its net profit for the year 2023.

According to Yonhap News Agency, the net profit reached 680.4 billion won (US$509.6 million) on a consolidated basis in 2023, up from 604.9 billion won in 2022.

The company also reported a substantial increase in operating profit, which climbed to 1.16 trillion won, marking a 28.9 percent year-on-year growth. However, sales saw a decline of 12.8 percent, totaling 33.1 trillion won last year. A POSCO International official attributed the profit increase in the energy business to the merger with POSCO Energy Co. that occurred in late 2022. Additionally, the company's profitability was enhanced by sales of environmentally friendly industrial materials to European markets, further contributing to the year's financial success.

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