Banking Sector February Delinquency Rate Rises by 0.02%p... Increase in Small Business and SMEs

Domestic Banks Record 0.33% Delinquency Rate on Won Loans

[Asia Economy Reporter Park Sun-mi] As of the end of February, the delinquency rate on Korean won loans at domestic banks rose by 0.02 percentage points, revealing an increase in delinquency rates for small business owners, small and medium-sized enterprises (SMEs), and household loans, who have faced difficulties due to the spread of COVID-19.

According to the "Status of Korean Won Loan Delinquency Rates at Domestic Banks (Provisional)" released by the Financial Supervisory Service on the 22nd, the delinquency rate on Korean won loans (based on principal and interest overdue by one month or more) at domestic banks stood at 0.33% as of the end of February, up 0.02 percentage points from 0.31% at the end of the previous month.

The amount of newly occurred delinquencies in February this year was 1 trillion won, about 300 billion won less than the 1.3 trillion won recorded in the previous month. The scale of delinquent loan resolution remained at 500 billion won, the same level as in January.

Looking at the delinquency rates by borrower category, the increase in delinquency rates among groups affected by COVID-19 is evident.

Corporate loan delinquency rates stood at 0.43% at the end of February, up 0.03 percentage points from 0.39% at the end of the previous month. While the delinquency rate for large corporate loans remained unchanged at 0.36%, the delinquency rate for SME loans rose to 0.44%, up 0.04 percentage points from 0.40% at the end of the previous month. Among these, the delinquency rate for small and medium-sized corporations increased by 0.06 percentage points to 0.59% from 0.54% at the end of the previous month, and the delinquency rate for individual business owner loans rose by 0.02 percentage points to 0.26% from 0.24% at the end of the previous month.

Meanwhile, the delinquency rate for household loans (0.22%) increased by 0.01 percentage points from 0.21% at the end of the previous month. Although the delinquency rate for mortgage loans (0.14%) remained at a similar level to the previous month, the delinquency rate for credit loans excluding mortgage loans (0.40%) rose by 0.03 percentage points from 0.37% at the end of the previous month.