Tour busi­nesses bor­row more from non-banks

The Korea Times - - FINANCE - (Yon­hap)

Close to 30 per­cent of ac­com­mo­da­tions and restau­rants tak­ing out loans re­ceived them from non-bank­ing in­sti­tu­tions in the third quar­ter this year, data from the Bank of Korea showed Fri­day, rais­ing con­cerns about their risks from in­ter­est rate fluc­tu­a­tions.

The loans by the hos­pi­tal­ity in­dus­try to­taled 54.55 tril­lion won ($48.64 bil­lion) in the quar­ter ended in Septem­ber, up 10.5 per­cent from a year ago.

Among the lend­ing, 16.33 tril­lion won was bor­rowed from non-bank­ing in­sti­tu­tions, a gain of 20.4 per­cent, ac­cord­ing to the tally from the cen­tral bank.

The pro­por­tion of loans from non-banks rose 0.6 per­cent­age point from the pre­vi­ous quar­ter to 29.9 per­cent. This is the high­est since the first quar­ter of 2008.

Re­lated data in­di­cate con­tin­ued dou­ble-digit in­creases in non-bank bor­row­ings since the third quar­ter of 2014.

The pace of gain was as high as the 30 per­cent range from the fi­nal quar­ter of 2016 to the third quar­ter of 2017 be­fore sub­sid­ing some­what.

By com­par­i­son, bor­row­ings from banks rose in dou­ble dig­its from the third quar­ter of 2014 to the first quar­ter of 2016 be­fore slip­ping to a sin­gle digit in the se­cond quar­ter of 2016.

The fig­ure has been ris­ing be­tween 4 per­cent and 6 per­cent last and this year.

The trend in­di­cated by the data is viewed with con­cern since loans from non-bank in­sti­tu­tions of­ten come with higher in­ter­est rates and fluc­tu­a­tions in the rates, ex­pos­ing bor­row­ers to big­ger risks.

It is also likely a sign that the busi­nesses, still in a slump, are forced to go to non-banks for loans af­ter reach­ing their bor­row­ing lim­its at banks.

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