Domestic Banks' Non-Performing Loans Reach 15.9 Trillion Won in Q1... Increase of 600 Billion Won Compared to Year-End

[Asia Economy Reporter Kangwook Cho] In the first quarter of this year, non-performing loans (NPLs) at domestic banks amounted to 15.9 trillion won, an increase of 600 billion won compared to the end of the previous year.

According to the provisional status of NPLs at domestic banks as of the end of the first quarter, announced by the Financial Supervisory Service on the 2nd, the NPL ratio of domestic banks in the first quarter was 0.78%, up 0.01 percentage points from 0.77% at the end of the previous year.

Among the total NPLs, corporate loans accounted for the majority at 13.7 trillion won (86.2%). This was followed by household loans (2 trillion won) and credit card receivables (200 billion won).

The loan loss provision coverage ratio at the end of the first quarter was 110.6%, down 1.5 percentage points from 112.1% at the end of the previous year. However, it rose 9.9 percentage points compared to 100.8% in the same period last year.

Newly generated NPLs during the first quarter amounted to 3 trillion won, a decrease of 700 billion won compared to 3.7 trillion won in the previous quarter. Newly generated corporate loan NPLs accounted for most of this at 2.1 trillion won, down 700 billion won from 2.8 trillion won in the previous quarter. Newly generated household loan NPLs were 800 billion won, similar to the previous quarter.

During the same period, the scale of NPL disposals was 2.4 trillion won, down 2.7 trillion won from 5.2 trillion won in the previous quarter. It was about 500 billion won less than 3 trillion won in the same period last year. The disposals were mainly through write-offs and sales (write-offs of 900 billion won, sales of 400 billion won), loan recovery through collateral disposal (700 billion won), and loan normalization (400 billion won), in that order.

Looking at the NPL ratios by sector, the corporate loan NPL ratio (1.09%) fell 0.01 percentage points from 1.11% at the end of the previous year. It decreased 0.33 percentage points compared to 1.43% in the same period last year. While the large corporate loan NPL ratio (1.40%) dropped 0.12 percentage points from 1.52% at the end of the previous year, the small and medium-sized enterprise loan NPL ratio (0.93%) rose 0.03 percentage points, and the individual business loan NPL ratio (0.38%) increased by 0.03 percentage points.

The household loan NPL ratio (0.26%) rose 0.01 percentage points from 0.25% at the end of the previous year, influenced by a 0.01 percentage point increase in mortgage loans (0.20%) and a 0.02 percentage point rise in other credit loans (0.40%).

The credit card receivables NPL ratio (1.31%) increased by 0.20 percentage points from 1.12% at the end of the previous year. Although the scale of NPLs was similar to the end of last year, this was interpreted as due to a 1.5 trillion won decrease in total loans during the first quarter of this year.

This content was produced with the assistance of AI translation services.