Top 5 Banks' Corporate Loans Near 800 Trillion Won... Delinquency Rates Also Rising

Major commercial banks are continuing to grow as they focus on corporate loans, which are less regulated by authorities compared to household loans. As of the end of last month, the outstanding corporate loans of the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?approached 800 trillion won.

According to the financial sector on the 4th, the outstanding corporate loans (large corporations + small and medium-sized enterprises) of the five major banks totaled 796.0455 trillion won as of the end of last month. This represents an increase of 10.894 trillion won compared to the previous month. Compared to the end of April last year, it increased by 75.9676 trillion won (about 11%).

The outstanding loans to large corporations amounted to 151.222 trillion won, up 6.1377 trillion won from the previous month, and increased by 36.5477 trillion won (about 32%) compared to the previous year. Loans to small and medium-sized enterprises, including individual business owners, also recorded 644.8235 trillion won, increasing by 4.7536 trillion won from the previous month and 39.4199 trillion won (about 7%) from the previous year. Both large corporation loans and SME loans have shown monthly growth since the beginning of this year.

Loans to individual business owners stood at 323.0632 trillion won as of the end of last month, increasing by 1.4082 trillion won from the previous month and 8.4274 trillion won (about 3%) compared to the previous year. The growth in corporate loans has continued steadily as banks seek new opportunities in corporate lending. A representative from a commercial bank said, "As the regulatory atmosphere on household loans continues, competition among banks for corporate loans is ongoing."

However, alongside the increase in corporate loans, rising delinquency rates have become a challenge for soundness management. Except for NH Nonghyup Bank and Woori Bank, corporate loan delinquency rates rose compared to the previous year. KB Kookmin Bank’s corporate loan delinquency rate for the first quarter was 0.23%, up 0.07 percentage points from the same period last year. Shinhan Bank’s corporate loan delinquency rate also rose by 0.06 percentage points to 0.34% year-on-year. In particular, Shinhan Bank’s SOHO loan delinquency rate has been steadily increasing since the second half of last year, reaching 0.40%. Hana Bank’s corporate loan delinquency rate was 0.30%, up 0.04 percentage points compared to the previous year.