South Korean banks' home-backed lending rebounded in September from its first fall in 11 months in August amid still-low borrowing costs, the central bank said Wednesday.
Local banks' mortgage loans reached an outstanding 276.8 trillion won (US$247.4 billion) as of the end of September, up 1.7 trillion won from the previous month, according to the Bank of Korea (BOK).
In August, bank mortgage lending declined by 300 billion won, the first fall since September 2009, as housing transactions remained sluggish amid the slumping property market.
"The supply of new apartment and loan demand for down payments increased last month, resulting in expansion in home-backed lending," a BOK official said.
September's monthly gain was slightly higher than the yearly average of a 1.4 trillion won monthly rise, but it stayed below increases of over 2 trillion won seen in June and July.
Last year, the government tightened regulations for mortgage loans in a bid to ease a spike in home-backed lending growth, but as the local property market has slumped, it decided in late August to temporarily ease mortgage lending and tax rules to bolster the housing market.
The BOK said it would be difficult to say that the September gain was attributable to the impact of the eased rules.
Meanwhile, the growth of South Korean banks' corporate lending sharply picked up last month from August, it added.
Corporate loans by local banks reached an outstanding 523.9 trillion won as of end-September, up 2.3 trillion won from the previous month.
The BOK said that the country's M2 is estimated to have grown in the low-8 percent range in September as bank lending was sluggish and the growth of foreign stock funds eased.
The data came a day before the BOK holds its monthly rate-setting meeting. More experts increased bets that the BOK would hike the key rate to 2.5 percent for October in a bid to curb mounting inflationary pressure.
The bank left the rate unchanged at 2.25 percent for the second straight month in September amid concerns about the faltering global economy. It raised the borrowing costs in July from an all-time low of 2 percent, the first rate hike since the onset of the global financial meltdown.