http://www.marketwatch.com/story/new-guidelines-for-korean-banks-may-slow-lending-2009-12-17?link=kiosk
The report noted that Korean banks' loan-deposit ratio improved to 112% as of September from a peak of 124% in December 2006.
The unwieldy loan-deposit ratio came after years of strong loan growth about Korean banks registered a strong growth of 67% in loans between 2005 and 2008, nearly thrice as much as the country's nominal economic growth during the period, the analysts said
"Given banks' earnings are more sensitive to net interest margins than loan growth, they will likely be better off with net interest margin protection than loan expansion at the expense of margin. The restriction may facilitate banks to move towards fee business and further market consolidation," Citigroup's Kim added.
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