With the prolonged coronavirus outbreak (Corona 19), banks concerned about bad credit are expected to raise the threshold for businesses and households in the first quarter. In particular, banks are expected to intensively raise the threshold for SMEs’ loans to manage their credit soundness. Was expected.
According to the results of the’financial institution loan behavior survey (4Q trend and 1Q forecast) released by the Bank of Korea on the 13th, the domestic bank loan attitude index (projected value) in the first quarter of this year was -8. In detail, it recorded -3 for large companies, -6 for SMEs, -6 for households, and -12 for households. This means that the loan review will be more rigorous compared to the previous quarter.
The Loan Behavior Survey is a survey targeting people in charge of credit services at domestic financial institutions. A plus (+) means lending attitude easing, credit risk increase, and an increase in loan demand. Negative (-) means the opposite.
A BOK official said, “During the first quarter, the loan attitude of domestic banks to companies was reinforced by the re-proliferation of Corona 19 and the continuing uncertainty in the internal and external economy, etc. “Household general loans will be slightly strengthened as the government’s regulations on credit loans continue, and household housing loans will be less than general loans, but the strengthening trend is expected to continue.”
In the first quarter, the corporate credit risk index recorded 25, three points higher than the previous quarter (22). Large companies and SMEs recorded 12 and 29 respectively, the same as in the fourth quarter of last year, and households were counted at 21, 6 points higher than the previous quarter (15).
An official from the BOK said, “Company’s credit risk is expected to increase mainly for SMEs due to deterioration in corporate performance due to continued sluggish real economy and continued uncertainty in internal and external conditions.” As a result, it is expected to increase, mainly for vulnerable borrowers such as low credit and low income groups.”
The demand for loans from both households and businesses is also expected to increase. The loan demand index for each borrower of domestic banks was 19, while large corporations switched positive from -3 in the previous quarter to 9 in the first quarter, while small and medium-sized enterprises (26), household housing (3) and household general (18) remained positive.
A BOK official said, “In the first quarter, corporate loan demand is expected to increase mainly for SMEs due to increased demand for working capital due to decreased sales and increased demand for spare funds due to uncertainty in the real economy.” It was expected to increase mainly in general loans due to the demand for funds and financial investment.”
It was written with the content provided through News1.