Last Year Savings Bank Loans 77 Trillion Won... 19% Increase from Previous Year
[Asia Economy Reporter Oh Hyung-gil] Last year, total loans from savings banks surged by 19.4% compared to the previous year, reaching 77.6 trillion won.
According to the provisional business performance of savings banks released by the Financial Supervisory Service on the 30th, the total assets of 79 operating savings banks as of the end of last year recorded 91.986 trillion won, an increase of 19.2% compared to the previous year.
Among total loans, corporate loans amounted to 43.2 trillion won, mainly corporate loans, increasing by 16.1% compared to the previous year, while household loans grew by 21.1% to 31.6 trillion won.
The total loan delinquency rate was 3.3%, down 0.4 percentage points from 3.7% at the end of 2019. The ratio of non-performing loans classified as substandard or below also decreased by 0.5 percentage points to 4.2% from 4.7% at the end of 2019.
The net income of savings banks was 1.4 trillion won, a 10.0% increase compared to the same period last year. Although loan interest rates fell due to low interest rates and provisions for loan losses increased, interest income significantly increased due to loan expansion.
The BIS-based capital adequacy ratio slightly declined to 14.29% compared to the end of the previous year but remained at a high level compared to the regulatory ratios of 8% for assets over 1 trillion won and 7% for assets under 1 trillion won.
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An official from the Financial Supervisory Service stated, "If the economic downturn prolongs, the possibility of latent risks such as rising delinquency rates becoming a reality is emerging, so we will encourage savings banks to enhance their loss absorption capacity by strengthening provisioning standards," adding, "We will also continue efforts to alleviate the financial burden on vulnerable borrowers through proactive pre-debt adjustment for low-income earners and self-employed individuals."
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