Korean bank loans to small firms surge in 2006

Korean bank lending to small and medium-sized companies soared in 2006 from a year earlier as lenders extended more loans to firms with a good credit rating, the nation's financial watchdog said Thursday (Jan. 25).

Outstanding bank loans to small and medium enterprises totaled 303.9 trillion won ($323.7 billion) as of the end of December, up 45.9 trillion won from a year earlier, according to the Financial Supervisory Service. Growth totaled 12.8 trillion in 2005.

"Bank lending to small and medium firms was very sound last year," the service said. "State and commercial lenders actively pushed to pick good-credit small firms and provided more loans."

Stronger government regulations on mortgage loans also led banks to eye small and medium businesses, it added.

The Industrial Bank of Korea boosted its lending to small and medium companies most sharply. Lending by the policy bank rose by 10.3 trillion won to an outstanding 56.9 trillion won as of the end of December.

Loans by Woori Bank increased by 9.1 trillion won to an outstanding 41 trillion won, while that by Hana Bank rose by 6.2 trillion won to 23.9 trillion won.

Top lender top Kookmin Bank extended an outstanding 36.4 trillion won in loans as of December, up 4.3 trillion won from a year ago, the watchdog said.

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