Domestic Banks' Non-Performing Loan Ratio at 0.41% at End of June... Same Level as Previous Year

Non-performing Loans of 10.5 Trillion Won
Increase of 100 Billion Won Compared to End of Previous Quarter

As the average loan interest rate in the banking sector has been rising for two consecutive months, a banner displaying the personal credit loan interest rates is hung on the exterior wall of a commercial bank in Seoul on the 31st. Photo by Jinhyung Kang aymsdream@

The Financial Supervisory Service announced on the 3rd that the non-performing loan (NPL) ratio of domestic banks at the end of June was 0.41%, similar to the end of the previous quarter (0.41%) and the same period last year (0.41%). The amount of non-performing loans was 10.5 trillion won, an increase of 100 billion won compared to the end of the previous quarter (10.4 trillion won). Corporate loans amounted to 8.2 trillion won, household loans 2.2 trillion won, and credit card receivables 200 billion won.

The loan loss provision coverage ratio at the end of June was 226.4%, a higher level compared to previous years. Compared to the end of the previous quarter (229.9%), it decreased by 3.5 percentage points due to the reversal of loan loss provisions related to the former Daewoo Shipbuilding & Marine Engineering.

Newly generated non-performing loans in the second quarter amounted to 4 trillion won, an increase of 1 trillion won compared to the previous quarter (3 trillion won). New corporate loan defaults were 2.8 trillion won, up 900 billion won from the previous quarter (1.9 trillion won). New household loan defaults were 1 trillion won, similar to the previous quarter (1 trillion won).

The amount of non-performing loans resolved in the second quarter was 3.9 trillion won, an increase of 1.2 trillion won compared to the previous quarter (2.7 trillion won). This is 1 trillion won higher than the same period last year (2.9 trillion won).

The corporate loan NPL ratio (0.49%) decreased by 0.01 percentage points compared to the end of the previous quarter (0.50%). The large corporate loan NPL ratio (0.35%) decreased by 0.03 percentage points compared to the end of the previous quarter (0.38%). The small and medium enterprise (SME) loan NPL ratio (0.57%) remained similar to the end of the previous quarter (0.57%). The SME corporate loan NPL ratio (0.77%) decreased by 0.03 percentage points compared to the end of the previous quarter (0.80%). The individual business loan NPL ratio (0.30%) increased by 0.03 percentage points compared to the end of the previous quarter (0.27%).

The household loan NPL ratio (0.24%) increased by 0.02 percentage points compared to the end of the previous quarter (0.23%). The mortgage loan NPL ratio (0.16%) increased by 0.02 percentage points compared to the end of the previous quarter (0.14%). Other unsecured loans (0.47%) increased by 0.02 percentage points compared to the end of the previous quarter (0.45%). The credit card receivables NPL ratio (1.27%) increased by 0.07 percentage points compared to the end of the previous quarter (1.20%).

The Financial Supervisory Service stated, "However, in preparation for the expansion of external uncertainties such as recent instability in the Chinese real estate market and the rise in U.S. Treasury yields, it is necessary to further strengthen proactive asset soundness management."

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