South Korean banks' household loan growth hit the 5-month high last month due to stronger demand for mortgage loans stemming from the government's efforts to boost housing transactions, data by the central bank showed Thursday.

Household loans extended by domestic banks reached 460.5 trillion won (423.1 billion U.S. dollars) as of the end of October, up 2 trillion won from a month earlier, according to the Bank of Korea (BOK). The October growth was the largest since May when the loans increased 2.2 trillion won.

The October growth was attributable to solid demand for home- backed loans. Housing transactions increased last month thanks to the government's efforts to rejuvenate the slumping housing market through tax cuts.

The government temporarily cut the acquisition and capital gains taxes in late September. Apartment transactions in Seoul increased to 3,900 in October, up from 2,100 in September and 2, 200 in August.

Mortgage loans increased 600 billion won in October, turning around from a 20 billion won reduction in the prior month. Credit loans expanded 1.5 trillion won last month due to payment of credit card bills spent during the Chuseok holiday.

Corporate loans by local lenders came in at 598.4 trillion won as of end-October, up 2.7 trillion won from a month before, according to the BOK.

Banks' lending to large corporations grew 2.2 trillion won on- month in October, with loans for small- and mid-sized enterprises (SMEs) increasing 0.6 trillion won. Endi

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