Domestic Bank Delinquency Rate at 0.39% in Late July... Up 0.04%p from Previous Month

At the end of July, the delinquency rate on Korean won loans at domestic banks rose to 0.39%, an increase of 0.04 percentage points from the previous month. Compared to the same period last year, it increased by 0.17 percentage points.

The Financial Supervisory Service (FSS) announced on the 19th that the amount of new delinquencies in July was 2 trillion won, similar to the previous month, while the amount of delinquent loans resolved was 1.1 trillion won, a decrease of 2 trillion won compared to the previous month.

The new delinquency rate in July was 0.09%, similar to the previous month, and rose by 0.05 percentage points compared to the same period last year.

By sector, the corporate loan delinquency rate was 0.41%, up 0.04 percentage points from the previous month. The delinquency rate for large corporations was 0.12%, an increase of 0.01 percentage points from the end of the previous month, while the delinquency rate for small and medium-sized enterprises (SMEs) was 0.49%, up 0.06 percentage points from the previous month.

The household loan delinquency rate recorded 0.36%, up 0.03 percentage points from the previous month. The delinquency rate for mortgage loans was 0.23%, rising 0.01 percentage points from the previous month, and the delinquency rate for household loans excluding mortgage loans, such as unsecured loans, was 0.71%, up 0.09 percentage points from the previous month.

The FSS explained that although the delinquency rate at domestic banks rose at the end of July, it remains at a level similar to the first half of the year and is still lower than the long-term trend before COVID-19 (the 10-year monthly average delinquency rate before COVID-19 was 0.78%).

However, considering global economic conditions, it is expected that the upward trend in delinquency rates may continue for some time. In this regard, an FSS official stated, "We plan to strengthen management of vulnerable sectors to ensure that banks' asset soundness remains stable in the second half of the year."

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