S.Korea banks ready to expand lending in Q3-survey

SEOUL, July 6 (Reuters) - South Korean banks grew more willing to expand lending to companies and households in the current quarter on expectations for an improving business environment, a survey by the central bank showed on Monday.

The Bank of Korea said in a statement an index measuring 16 domestic banks' lending attitudes rose to 10 for the third quarter from 7 in the second, indicating banks will loosen their lending criteria.

In particular, the sub-index gauging lending attitudes towards households jumped to 13 from the second quarter's 9, marking its highest in 7-½ years.

The sub-index for lending intentions towards small and medium-sized companies declined to 13 from 16.

"For households, lending attitudes are likely to be loosened in response to rising demand, with market interest rates staying low and amid growing expectations for house price increases," the central bank said.

The findings came after strong factory output, exports and capital spending data released recently reinforced hopes for an accelerating recovery in Asia's fourth-largest economy [ID:nSEO136829], and despite remarks by the country's financial regulators that they would try to put the brakes on rising home-backed loans amid signs of asset price bubbles. [ID:nSEO240500]. (Reporting by Kim Yeon-hee; Editing by Yoo Choonsik and Jonathan Hopfner)