Domestic Banks' KRW Loan Delinquency Rate at 0.27%... Slight Increase

Corporate loan delinquency rate is 0.29%
Household loan delinquency rate is 0.24%
Both show a slight upward trend

[Image source=Yonhap News]

[Asia Economy Reporter Sim Nayoung] In November last year, the delinquency rate on won-denominated loans by domestic banks increased. On the 19th, the Financial Supervisory Service announced that the delinquency rate on won-denominated loans (based on principal and interest overdue for more than one month) by domestic banks at the end of November last year was 0.27%, up 0.02 percentage points from the previous month. Compared to one year ago, it rose by 0.01 percentage points.

At the end of November last year, the delinquency rate on corporate loans was 0.29%, up 0.03 percentage points from the previous month, and the delinquency rate on household loans was 0.24%, up 0.02 percentage points. The delinquency rate on won-denominated loans by domestic banks recorded 0.36% at the end of 2019, then decreased to 0.28% at the end of 2020 and 0.21% at the end of 2021. However, it has recently shown a slight increase, mainly in household credit loans.

Due to the extension of loan maturities and repayment deferrals for small business owners affected by COVID-19, the overall delinquency rate remains low.

The Financial Supervisory Service stated, "Although the delinquency rate on won-denominated loans by domestic banks is still considered at a favorable level, it is necessary to proactively prepare for the possibility of increased credit losses due to worsening domestic and international economic conditions." The Financial Supervisory Service plans to encourage banks with insufficient loan loss provisions to accumulate adequate provisions during the 2022 year-end settlement to maintain bank soundness.

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