South Korean banks expect to tighten household lending standards in the third quarter as regulators maintain pressure on household debt, while demand for small business and unsecured household loans is set to remain elevated, the Bank of Korea said Monday. Banks forecast no further easing in lending to large companies or small and medium-sized enterprises (SME), while standards for mortgages and general household loans are expected to stay restrictive. They also expect credit risk to rise across both corporate and household borrowers.

Demand for SME loans is expected to strengthen further as companies seek liquidity amid economic uncertainty and higher