Financial Supervisory Service Announces Bank Loan Delinquency Rates at End of March
Up 0.04 Percentage Points from Previous Month
Corporate Loan Delinquency Rate Rises by 0.06 Percentage Points
SME Loan Delinquency Rate Shows the Sharpest Increase
In April of this year, the delinquency rate on loans at domestic banks surged once again. This is attributed to a significant increase in the delinquency rates among small and medium-sized enterprises (SMEs), including small corporations and individual business owners, amid delayed domestic demand recovery and worsening external conditions, which are heightening downward pressure on the economy.
According to the Financial Supervisory Service on the 27th, as of the end of April, the delinquency rate on won-denominated loans at domestic banks (based on loans overdue for more than one month) was provisionally tallied at 0.57%. This represents a 0.04 percentage point increase from the end of the previous month (0.53%).
In April, the amount of newly delinquent loans was 2.9 trillion won, which is 100 billion won less than in January (3 trillion won). Although the amount of resolved delinquent loans fell by 2.4 trillion won, from 4.1 trillion won to 1.7 trillion won, the delinquency rate rebounded. The Financial Supervisory Service explained that this is mainly due to the relatively sharp increase in the delinquency rate among SMEs.
By sector, as of the end of April, the delinquency rate for corporate loans was 0.68%, up 0.06 percentage points from the end of the previous month. The delinquency rate for large corporate loans was 0.13%, a 0.02 percentage point increase from 0.11% at the end of March. The delinquency rate for SME loans rose by 0.17 percentage points to 0.83%.
In particular, the delinquency rate for small corporations rose by 0.09 percentage points from the previous month to 0.89%, while the delinquency rate for individual business owner loans also increased by 0.03 percentage points from March to reach 0.74%.
The delinquency rate for household loans was 0.41%, up 0.02 percentage points from the previous month. The delinquency rate for mortgage loans was 0.30%, a 0.01 percentage point increase from the previous month. The delinquency rate for household loans excluding mortgages (such as credit loans) was 0.86%, up 0.07 percentage points from the end of the previous month.
An official from the Financial Supervisory Service stated, "We will strengthen asset soundness management by actively pursuing the disposal and sale of delinquent and non-performing loans and expanding loan-loss provisions. At the same time, we will promote proactive debt restructuring for borrowers at risk of delinquency, including individual business owners, to help alleviate the debt burden on vulnerable borrowers."
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