Due to a slump in construction, loans to related industries decreased in the fourth quarter (September–December) of last year. This marked six straight quarters of decline, the longest period since related figures began being compiled in 2008.
According to the Bank of Korea's statistics on "industry-by-loans by deposit-taking institutions in the fourth quarter," released on the 9th, total loans to all industries stood at 2,026.1 trillion won at the end of the fourth quarter of last year. That was up 8.6 trillion won from the previous quarter, but the increase was more than halved from the prior quarter's 20.2 trillion won.
By industry, construction loans fell by 2.9 trillion won. The drop was driven by a decline in construction progress payments, which refer to the on-site construction performance of domestic projects by construction companies. Construction progress payments fell from 36 trillion won in the third quarter of last year to 34.5 trillion won in the fourth quarter. Manufacturing loans increased by 1.2 trillion won, but the pace of growth slowed from the previous quarter (+4.1 trillion won).
Lee Hye-young, head of the financial statistics team at the Bank of Korea, said the decline in construction loans was due to weak economic conditions, and noted of manufacturing that "investment is sluggish due to external uncertainty."
The increase in service-sector loans (9.3 trillion won) was also smaller than in the third quarter (15.7 trillion won). In most sectors, the growth in loans narrowed, including finance and insurance (9.6 trillion won → 6.9 trillion won), wholesale and retail (2.1 trillion won → 300 billion won), and accommodation and food services (1.2 trillion won → less than 100 billion won).
By loan purpose, working capital loans rose by 2 trillion won, and facility investment loans increased by 6.6 trillion won. By type of financial institution, deposit banks' industry loans increased by 9.6 trillion won, while nonbank deposit-taking institutions saw a decrease of 1 trillion won.
Classifying deposit banks' industry loans by corporate size, the increase for large corporations fell from 7.9 trillion won in the third quarter to 900 billion won, and for small and midsize companies from 10.3 trillion won to 6.9 trillion won. Loans to sole proprietors also shrank from 2.1 trillion won to less than 100 billion won.