Banking Sector's Non-Performing Loan Ratio at 0.62% at End of March... Lowest Ever Recorded
0.02%p Decrease Compared to the End of the Previous Quarter
[Asia Economy Reporter Park Sun-mi] The non-performing loan (NPL) ratio of domestic banks as of the end of March fell to an all-time low of 0.62%.
According to the "Status of Non-Performing Loans of Domestic Banks (Provisional)" announced by the Financial Supervisory Service on the 2nd, the NPL ratio of domestic banks at the end of March was 0.62%, down 0.02 percentage points from 0.64% at the end of the previous quarter and 0.16 percentage points from the same period last year. This is the lowest level ever recorded.
The amount of non-performing loans stood at 13.8 trillion KRW, a decrease of 100 billion KRW (-1.0%) compared to the end of the previous quarter. Corporate loans accounted for the majority of non-performing loans at 11.9 trillion KRW (86.6%), followed by household loans (1.7 trillion KRW) and credit card loans (100 billion KRW).
The NPL ratios for both corporate loans and household loans declined. The corporate loan NPL ratio of 0.89% decreased by 0.03 percentage points from the end of the previous quarter, and the household loan NPL ratio of 0.20% fell by 0.01 percentage points. The credit card loan NPL ratio of 0.97% remained similar to 0.98% at the end of the previous quarter.
Newly generated non-performing loans in the first quarter amounted to 2.5 trillion KRW, down 800 billion KRW from 3.2 trillion KRW in the previous quarter. New corporate loan NPLs were 1.8 trillion KRW, a decrease of 700 billion KRW from 2.6 trillion KRW in the previous quarter, while new household loan NPLs were 600 billion KRW, similar to the previous quarter. During this period, the amount of non-performing loans resolved was 2.7 trillion KRW, down 700 billion KRW from 3.4 trillion KRW in the previous quarter.
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Meanwhile, as of the end of March, the loan loss provision coverage ratio of the banking sector was 137.3%, down 0.9 percentage points from 138.3% at the end of the previous quarter. Commercial banks recorded 149.9%, a decrease of 3 percentage points, while regional banks, internet banks, and specialized banks were recorded at 112.1%, 173.5%, and 134.4%, respectively.
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