As Delinquency Rates Rise... Top 5 Banks Cleared 2.2 Trillion Won in Non-Performing Loans in the First Half

The Scale of Sales and Acquisitions in the First Half of This Year Matches Last Year's Entire Scale
Each Bank Hits the Highest Level in 3 to 4 Years

As loan delinquency rates rise due to the economic downturn and interest rate hikes, banks are aggressively selling off non-performing loans. The amount of sales and write-offs by the five major banks in the first half of the year has already exceeded 2 trillion won, matching the total for the entire previous year. Individually, each bank is experiencing the highest volume of sales and write-offs in the past 3 to 4 years.

According to the financial sector on the 24th, the five major commercial banks (KB, Shinhan, Hana, Woori, and NH Nonghyup) collectively sold off non-performing loans worth 2.213 trillion won in the first half of this year.

Banks classify loans overdue by more than three months as non-performing loans with ratings of 'substandard' or lower. These are managed separately, and if the likelihood of recovery is deemed significantly low, they are treated as written-off assets.

For unsecured credit loans, banks typically write off the loans entirely from their books, while mortgage loans are handled by selling them at a discount to asset securitization specialists or similar entities.

The scale of sales and write-offs in the first half of this year is 2.23 times that of the first half of last year (990.7 billion won), reaching a level comparable to last year's annual total (2.2713 trillion won).

For Bank A, the sales and write-offs in the second quarter amounted to 270.3 billion won, the largest in 3 years and 9 months since the second quarter of 2019 (277.1 billion won). Bank B's second-quarter sales and write-offs (361.9 billion won) were also the highest since the fourth quarter of 2019.

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