July Delinquency Rate for Won-Denominated Loans at Domestic Banks Hits 0.57%, Highest in Seven Years

Corporate loan delinquency rate up 0.07%p
Household loan delinquency rate up 0.02%p

At the end of July, the delinquency rate on won-denominated loans at domestic banks reached 0.57%, marking the highest July figure in seven years. This was largely due to increases in both corporate and household loan delinquency rates.

Financial Supervisory Service Headquarters, Yeouido, Yeongdeungpo-gu, Seoul. Financial Supervisory Service

According to the "Status of Won-Denominated Loan Delinquency Rates at Domestic Banks as of the End of July 2025 (Provisional)" released by the Financial Supervisory Service on the 26th, the delinquency rate on won-denominated loans at domestic banks (based on principal and interest overdue by more than one month) was recorded at 0.57%. This is the highest July figure since 0.56% in July 2018. It rose by 0.05 percentage points from the end of the previous month (0.52%) and by 0.10 percentage points compared to the end of the same month last year (0.47%).

In July, the amount of newly delinquent loans was 2.8 trillion won, similar to the previous month. The amount of resolved delinquent loans was 1.6 trillion won, a decrease of 4.1 trillion won from the previous month (5.7 trillion won). During the same period, the new delinquency rate was 0.11%, similar to the previous month (0.11%).

By sector, the delinquency rate for corporate loans was 0.67%, up 0.07 percentage points from the end of the previous month (0.60%). The delinquency rate for large corporate loans was 0.14%, similar to the end of the previous month (0.14%). The delinquency rate for small and medium-sized enterprise loans was 0.82%, up 0.08 percentage points from the end of the previous month (0.74%). The delinquency rate for small and medium-sized corporations was 0.90%, up 0.11 percentage points from the end of the previous month (0.79%).

The delinquency rate for household loans was 0.43%, up 0.02 percentage points from the end of the previous month (0.41%). The delinquency rate for mortgage loans was 0.29%, down 0.01 percentage points from the end of the previous month (0.30%). Excluding mortgage loans, the delinquency rate for household loans was 0.86%, up 0.08 percentage points from the end of the previous month (0.78%).

A Financial Supervisory Service official stated, "We will guide banks to maintain sufficient loss-absorbing capacity going forward," adding, "We plan to strengthen asset soundness management, especially for banks with a sharp increase in delinquency rates and a high proportion of loans to vulnerable sectors, by encouraging the sale and write-off of non-performing loans and the expansion of loan-loss provisions."