Domestic Banks' Non-Performing Loan Ratio at 0.65% by End of September... Lowest Ever Recorded

900 Billion Decrease Compared to End of Previous Quarter
Both Corporations and Households Decline

[Asia Economy Reporter Kim Hyo-jin] As of the end of September this year, the non-performing loan (NPL) ratio of domestic banks recorded an all-time low of 0.65%, the Financial Supervisory Service announced on the 26th. This is a decrease of 0.06 percentage points compared to the end of the previous quarter (0.71%).

Compared to the end of September last year (0.86%), it fell by 0.20 percentage points.

The amount of non-performing loans was 14.1 trillion KRW, down 900 billion KRW from the end of the previous quarter. Corporate loans accounted for 12 trillion KRW, making up the majority of 85.5% of total non-performing loans. Household loans (1.9 trillion KRW) and credit card receivables (100 billion KRW) followed.

The loan loss provision ratio at the end of September was 130.6%, up 9.4 percentage points from 121.2% at the end of the previous quarter.

Newly generated non-performing loans during the third quarter amounted to 2.7 trillion KRW, a decrease of 900 billion KRW compared to the previous quarter (3.6 trillion KRW).

New corporate loan non-performing loans were 1.9 trillion KRW, down 800 billion KRW from the previous quarter (2.7 trillion KRW), and new household loan non-performing loans were 600 billion KRW, down 200 billion KRW from the previous quarter (800 billion KRW).

The amount of non-performing loans resolved during the third quarter was 3.6 trillion KRW, down 800 billion KRW from the previous quarter (4.5 trillion KRW).

The main methods were write-offs and sales (1 trillion KRW in write-offs and 800 billion KRW in sales), loan recovery through collateral disposal (1 trillion KRW), and loan normalization (500 billion KRW), in that order.

By sector, the NPL ratio for corporate loans was 0.92%, down 0.07 percentage points from 0.99% at the end of the previous quarter.

The NPL ratio for large corporate loans was 1.13%, a decrease of 0.15 percentage points compared to 1.28% at the end of the previous quarter.

The NPL ratio for small and medium-sized enterprise (SME) loans was 0.80%, down 0.03 percentage points from 0.83% at the end of the previous quarter. The NPL ratio for individual business owner loans was 0.30%, down 0.03 percentage points from 0.33% at the end of the previous quarter.

The NPL ratio for household loans was 0.23%, down 0.02 percentage points from 0.25% at the end of the previous quarter.

Among household loans, the NPL ratio for mortgage loans was 0.17%, down 0.01 percentage points from 0.19% at the end of the previous quarter, and other unsecured loans were 0.35%, down 0.05 percentage points from 0.40% at the end of the previous quarter.

The NPL ratio for credit card receivables was 1.01%, down 0.16 percentage points from 1.17% at the end of the previous quarter.

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