S.Korea's household debts keep record-breaking trend in Q1

South Korea's household debts kept a record-breaking trend in the first quarter on the back of record-low interest rates, central bank data showed on Thursday.

Household credit, which includes household debts owed to financial institutions and purchase on credit, reached 1,223.7 trillion won (1.03 trillion U.S. dollars) as of end-March, up 1.7 percent from three months earlier, according to the Bank of Korea (BOK).

The first-quarter figure was the highest since the bank began compiling the data in the fourth quarter of 2002. From a year earlier, the household credit jumped 11.4 percent, or 125.4 trillion won, marking the fastest growth in history.

The country's household debts kept a record-breaking trend as the central bank kept its policy rate at an all-time low of 1.5 percent. Market watchers expected the BOK to cut rates further to help the government restructure shipping and shipbuilding industries.

Among the household credit, loans to households increased 1.8 percent, or 20.5 trillion won, from three months earlier to 1,158.5 trillion won at the end of March.

Household loans extended by deposit-taking banks stood at 569.3 trillion won as of end-March, up 5.6 trillion won from three months ago. The growth was about one-fourth of a 22.2 trillion-won increase tallied in the fourth quarter of last year.

However, loans extended by other financial institutions, including insurers, securities firms and credit card issuers that charge higher interests than commercial banks, expanded 7.4 trillion won in the first quarter, larger than a 4.7 trillion-won growth in the previous quarter.

Purchase on credit inched up 0.1 percent to 65.2 trillion won as of end-March compared with three months ago. Enditem