[Asia Economy Reporter Song Hwajeong] At the end of July, the delinquency rate on won-denominated loans at domestic banks slightly increased to 0.22% compared to the previous month.
According to the Financial Supervisory Service on the 22nd, the delinquency rate on won-denominated loans at domestic banks (based on principal and interest overdue for more than one month) was 0.22% at the end of July, up 0.02 percentage points from 0.20% at the end of the previous month. Compared to the same period last year, it decreased by 0.05 percentage points. The delinquency rate tends to rise during the quarter as banks strengthen management of overdue loans at the end of the quarter, then decline at the quarter-end. The delinquency rate at domestic banks has fluctuated slightly around the 0.2% level since it fell to the 0.2% range in June last year.
The amount of new delinquencies in July was 900 billion KRW, similar to the previous month, but the amount of overdue loan settlements was 500 billion KRW, down 1.1 trillion KRW from the previous month.
By sector, the delinquency rate on corporate loans rose 0.02 percentage points to 0.24% from 0.22% at the end of the previous month. The delinquency rate on large corporate loans remained at 0.14%, the same as the previous month. The delinquency rate on small and medium-sized enterprise (SME) loans increased by 0.03 percentage points to 0.27% compared to the previous month. The delinquency rate for small and medium-sized corporations rose 0.04 percentage points to 0.34%, and the delinquency rate on individual business owner loans increased by 0.01 percentage points to 0.17%.
The delinquency rate on household loans was 0.19%, and the delinquency rate on mortgage loans was 0.11%, both up 0.01 percentage points from the previous month. The delinquency rate on household loans excluding mortgage loans (such as unsecured loans) rose 0.03 percentage points to 0.37%.
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