Bank Loan Delinquency Rate at 0.46% in Late November...Up 0.03%p from Previous Month

New Delinquent Amount Reaches 2.7 Trillion Won
Increase of 300 Billion Won Compared to Previous Month

At the end of November last year, the delinquency rate on won-denominated loans at domestic banks showed a slight upward trend.

Financial Supervisory Service building in Yeouido, Seoul. Photo by Younghan Heo younghan@

On the 25th, the Financial Supervisory Service (FSS) announced that as of the end of November last year, the delinquency rate on won-denominated loans at domestic banks (based on principal and interest overdue by one month or more) was recorded at 0.46%. This represents an increase of 0.03 percentage points compared to the previous month and 0.19 percentage points compared to the same month last year.

The FSS stated, "The delinquency rate at the end of November last year rose by 0.03 percentage points from the previous month due to an increase in newly occurring delinquent loans, but the increase was somewhat smaller than the previous month's 0.04 percentage points. Typically, the delinquency rate is expected to decline at the end of December as the scale of delinquent loan resolution expands, but it is necessary to prepare for the possibility of an increase in the delinquency rate due to the expansion of new delinquencies."

The amount of newly occurring delinquencies in November increased by 300 billion won from the previous month to 2.7 trillion won. The resulting new delinquency rate rose by 0.01 percentage points to 0.12%. The scale of delinquent loan resolution increased by 700 billion won to 2 trillion won.

By sector, the delinquency rate on corporate loans rose by 0.04 percentage points from the previous month to 0.52%. The delinquency rates for small and medium-sized enterprise (SME) loans, small and medium-sized corporations, and individual business owner loans each increased by 0.05 percentage points to 0.61%, 0.64%, and 0.56%, respectively. Compared to the same month last year, these rates rose by 0.27 percentage points, 0.24 percentage points, and 0.30 percentage points, respectively. The delinquency rate on large corporate loans improved, decreasing by 0.01 percentage points from the previous month to 0.18%, but on an annual basis, it increased by 0.11 percentage points.

The delinquency rate on household loans rose by 0.02 percentage points from the previous month and 0.15 percentage points from the same month last year to 0.39%. The delinquency rate on mortgage loans increased by 0.01 percentage points and 0.11 percentage points, respectively, to 0.25%. The delinquency rate on household loans excluding mortgage loans rose by 0.05 percentage points and 0.27 percentage points to 0.76%.

An official from the authorities said, "We will strengthen soundness management proactively by expanding the accumulation of loan loss provisions to enhance loss absorption capacity in preparation for the possibility of increased credit losses," adding, "We will encourage banks with high delinquency rates to expand the resolution of delinquent and non-performing loans through sales and transfers."