Bank Non-Performing Loan Ratio Rises Centered on 'Small and Medium Enterprises and Credit Loans'

Financial Supervisory Service Announces Non-Performing Loan Ratio of Domestic Banks at End of March
Non-Performing Loans Increased by 300 Billion KRW to 10.4 Trillion KRW Compared to Previous Quarter
Non-Performing Loan Ratio Rose by 0.01 Percentage Points to 0.41% Compared to Previous Quarter

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The Financial Supervisory Service announced that the non-performing loan (NPL) ratio of domestic banks at the end of March was 0.41%, up 0.01 percentage points from the end of the previous quarter (0.40%). This is a decrease of 0.04 percentage points compared to the same period last year (0.45%).

The amount of non-performing loans was 10.4 trillion KRW, an increase of 300 billion KRW compared to the end of the previous quarter. Corporate loans accounted for 8.2 trillion KRW, household loans 2 trillion KRW, and credit card loans 200 billion KRW.

At the end of March, the loan loss provision ratio was 229.9%, rising 2.7 percentage points from the end of the previous quarter (227.2%) due to increased provisions. Compared to the same period last year (181.6%), it increased by 48.3 percentage points.

Newly generated non-performing loans in the first quarter of this year amounted to 3 trillion KRW, a decrease of 100 billion KRW from the previous quarter (3.1 trillion KRW). Compared to the same period last year (1.8 trillion KRW), it increased by 1.2 trillion KRW. New corporate loan NPLs were 1.9 trillion KRW, down 400 billion KRW from the previous quarter (2.3 trillion KRW), while new household loan NPLs were 1 trillion KRW, up 300 billion KRW from the previous quarter (700 billion KRW).

The amount of non-performing loans resolved in the first quarter was 2.7 trillion KRW, an increase of 100 billion KRW from the previous quarter (2.6 trillion KRW). Compared to the same period last year (2.8 trillion KRW), it decreased by 100 billion KRW.

The NPL ratio by sector showed an upward trend in small and medium enterprises (SMEs), unsecured loans, and credit card loans. Large corporate loans (0.38%) decreased by 0.11 percentage points from the end of the previous quarter (0.49%), while SME loans (0.57%) increased by 0.04 percentage points from the end of the previous quarter (0.53%).

The household loan NPL ratio (0.23%) rose by 0.05 percentage points from the end of the previous quarter (0.18%), with mortgage loans (0.14%) increasing by 0.02 percentage points from the end of the previous quarter (0.12%), and unsecured loans (0.45%) rising by 0.11 percentage points from the end of the previous quarter (0.34%). The credit card loan NPL ratio (1.20%) increased by 0.29 percentage points from the end of the previous quarter (0.91%).

The Financial Supervisory Service stated, "Although the NPL ratio of domestic banks at the end of March slightly increased compared to the end of the previous quarter, overall it remains at a healthy level," and added, "the loan loss provision ratio also reached a record high as banks expanded their provisions during the first quarter."