Banks are expected to continue with their tightened loan policies, particularly regarding mortgage loans.

According to a survey released by the Bank of Korea(BOK) on Wednesday, loan officers at financial institutions forecast that while lending sentiment toward small and medium-sized enterprises(SMEs) in banks will somewhat ease in the fourth quarter, mortgage loans will be tightened further.

This is due to the continued policy of strengthening household debt management, such as the expanded application of stress Debt Service Ratio(DSR) to credit loans.

However, the demand for loans in the fourth quarter is expected to increase, particularly among SMEs and households.

The BOK cites the heightened need for working capital and liquidity among SMEs, while increased credit loans for living expenses for households are expected to drive up the demand, as well.