August Bank Won Loan Delinquency Rate 0.24%...0.02%P Increase from Previous Month

[Asia Economy Reporter Song Hwajeong] At the end of August, the delinquency rate on won-denominated loans at domestic banks showed an upward trend for the second consecutive month, reaching 0.24%.

According to the Financial Supervisory Service on the 19th, the delinquency rate on won-denominated loans at domestic banks (based on principal and interest overdue for more than one month) was 0.24% at the end of August, up 0.02 percentage points from 0.22% at the end of the previous month. Compared to the same period last year, it decreased by 0.04 percentage points. The delinquency rate tends to rise during the quarter as banks strengthen management of overdue loans at the end of the quarter, then fall at the quarter-end. The delinquency rate at domestic banks has fluctuated within the 0.2% range since it dropped to the 0.2% level in June last year.

In August, the amount of newly occurred delinquencies (1.1 trillion KRW) exceeded the amount of resolved overdue loans (600 billion KRW), resulting in an increase of 500 billion KRW in the outstanding delinquent balance.

By sector, the delinquency rate on corporate loans rose 0.02 percentage points to 0.27% compared to the end of the previous month (0.24%). The delinquency rate on large corporate loans fell 0.01 percentage points to 0.13% from 0.14% at the end of the previous month. The delinquency rate on small and medium-sized enterprise (SME) loans increased 0.03 percentage points to 0.30%. The delinquency rate for small and medium-sized corporations rose 0.04 percentage points to 0.38%, and the delinquency rate on loans to individual business owners increased 0.02 percentage points to 0.20%.

The delinquency rate on household loans rose 0.02 percentage points to 0.21% compared to the end of the previous month. The delinquency rate on mortgage loans increased 0.01 percentage points to 0.12%. Excluding mortgage loans, the delinquency rate on other household loans (such as credit loans) rose 0.05 percentage points to 0.42%.

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