Bank Delinquency Rate Rises in July After One Month... Large Corporations Jump 0.08%p

Household Loan Surge Amid 0.01%p Increase in Delinquency Rate

Bank loan counter reference image (Source=Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] In July, the delinquency rate on won-denominated loans at banks reversed to an increase after a month. Both personal and corporate loan delinquency rates showed an upward trend compared to the previous month. In particular, the delinquency rate on large corporate loans jumped by 0.08 percentage points compared to the previous month, highlighting the need for soundness management.

On the 10th, the Financial Supervisory Service announced that as of the end of July, the delinquency rate on won-denominated loans at domestic banks (based on principal and interest overdue for more than one month) was 0.36%, up 0.03 percentage points from the end of the previous month (0.33%).

During July, new delinquencies amounted to 1.3 trillion won, an increase of 200 billion won compared to the previous month, while the amount of delinquent loans resolved was 700 billion won, down by 2 trillion won. Compared to the end of July last year (0.45%), this is 0.10 percentage points lower.

Notably, the delinquency rate on large corporate loans rose significantly. At the end of July, the delinquency rate on corporate loans was 0.44%, up 0.05 percentage points from the end of the previous month (0.39%). Among these, the delinquency rate on large corporate loans was 0.29%, jumping 0.08 percentage points from 0.21% at the end of the previous month. The delinquency rate on small and medium-sized enterprise (SME) loans rose 0.04 percentage points to 0.47% from 0.44% at the end of the previous month.

The delinquency rate for small and medium-sized corporations was 0.62%, up 0.06 percentage points from 0.56% at the end of the previous month, and the delinquency rate on loans to individual business owners was 0.30%, up 0.01 percentage points from 0.29% at the end of the previous month.

During this period, the delinquency rate on household loans was 0.26%, a 0.01 percentage point increase from 0.25% at the end of the previous month. Among household loans, the delinquency rate on mortgage loans remained unchanged at 0.17%, while the delinquency rate on household loans excluding mortgages (such as credit loans) rose 0.03 percentage points to 0.45% from 0.42% at the end of the previous month.

The bank delinquency rate rose by 0.02 percentage points at the end of May compared to the previous month, then fell by 0.09 percentage points at the end of June, recording the lowest level (0.33%) since statistics began to be compiled.

Financial Supervisory Service

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