South Korea’s industrial loans extended by local financial institutions exceeded the 1,000 trillion won ($892 billion) mark for the first time in the first quarter of 2017 as borrowings from the manufacturing, service, and constructions sectors evenly increased, data showed on Monday.

According to data released by the Bank of Korea (BOK) on Monday, the balance of industrial loans reached 1,001.7 trillion won as of end of March, up 1.6 percent or 16.1 trillion won from the end of December.

Industrial loans include borrowings by not only corporations but also public entities including hospitals and the government from depository institutions such as banks and mutual savings banks.

It is the first time that industrial loan balance surpassed the 1,000 trillion won mark since the BOK started tracking the data from the first quarter of 2008. Outstanding industrial loans have increased steadily over years along with the growing economy. The balance exceeded 800 trillion won for the first time in the end of March 2013, and over the past four years, the balance gained sharply by 201.3 trillion won as businesses opted to borrow more in the persisting low interest rate environment.

Outstanding industrial loans shrank 800 billion won in the fourth quarter of 2016 but in the first three months of this year, borrowings in the manufacturing, service, and constructions sectors expanded.

By sector, loans extended to businesses in the manufacturing sector came to 330.5 trillion won as of end of March, up 6.2 trillion won from the end of December. The gain comes after the balance dropped by slightly over 9 trillion won in the fourth quarter of last year.

Loans to businesses in the service sector increased 8.2 trillion won to 577.4 trillion won over the same period. Borrowing to the real estate sector in particular increased 4.8 trillion won to 176.2 trillion won, which is double the amount of increase shown in the service sector.

Loans to businesses in the construction sector also gained 1.9 trillion won to 39.5 trillion won at the end of March, marking the largest increase since the third quarter of 2008.

By financial institution, depository banks extended 817.4 trillion won worth of industrial loans in the first quarter of this year, up 10.7 trillion won from the previous quarter, while non-banking institutions including savings and mutual banks gave out 5.5 trillion won more loans to total 184.3 trillion won over the same period.

By Boo Jang-won

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