Domestic Banks' Delinquency Rate at 0.4% at End of May... Up 0.03 Percentage Points from End of Previous Month

Delinquency Rates Rise Mainly in SME and Personal Credit Loans
FSS: "The Increase is Gradually Narrowing"

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At the end of May, the delinquency rate on won-denominated loans at domestic banks (based on principal and interest overdue for more than one month) was 0.40%, up 0.03 percentage points from the end of the previous month (0.37%). It increased by 0.16 percentage points compared to the end of May last year (0.24%).

According to the "Status of Won-Denominated Loan Delinquency Rates at Domestic Banks at the End of May" released by the Financial Supervisory Service on the 27th, the amount of new delinquencies in May was 2.1 trillion won, an increase of 300 billion won compared to the previous month. The amount of delinquent loans resolved was 1.3 trillion won, up 400 billion won from the previous month.

By sector, the corporate loan delinquency rate stood at 0.43% as of the end of May 2023, up 0.04 percentage points from the end of the previous month (0.39%). It rose 0.16 percentage points compared to the same month last year (0.27%).

In particular, the delinquency rate for small and medium-sized enterprise (SME) loans increased by 0.05 percentage points to 0.51% from 0.46% at the end of the previous month. Specifically, the delinquency rate for small and medium-sized corporations was 0.55%, up 0.04 percentage points from 0.51% at the end of the previous month, and the delinquency rate for individual business owner loans rose 0.04 percentage points to 0.45% from 0.41%.

The delinquency rate for large corporate loans (0.12%) increased by 0.03 percentage points from 0.09% at the end of the previous month.

Among household loans, credit loans showed the fastest increase. The household loan delinquency rate (0.37%) rose 0.03 percentage points from 0.34% at the end of the previous month. Among these, the delinquency rate for credit loans was 0.75%, up 0.08 percentage points from 0.67% at the end of the previous month.

The delinquency rate for mortgage loans was 0.23%, up 0.02 percentage points from 0.21% at the end of the previous month.

The Financial Supervisory Service stated, "The delinquency rate of domestic banks has been on an upward trend since the second half of last year, but the rate of increase is gradually narrowing."

It added, "Typically, delinquency rates tend to decline at the end of a quarter compared to during the quarter, and as banks have recently expanded the resolution of delinquent loans to manage soundness, the delinquency rate at the end of the second quarter (end of June) is expected to decline more sharply compared to the end of the first quarter (end of March)."

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