Domestic Banks' Non-Performing Loan Ratio at 0.44%, Up 0.03%p from End of Previous Quarter
Decrease in Allowance for Bad Debts Ratio Due to Increase in Non-Performing Loans
At the end of September, the non-performing loan (NPL) ratio of domestic banks stood at 0.44%, up 0.03 percentage points from 0.41% at the end of the previous quarter. It also rose 0.06 percentage points compared to 0.38% in the same period last year.
On the 30th, the Financial Supervisory Service announced that the size of non-performing loans increased by 1 trillion KRW from 10.5 trillion KRW at the end of the previous quarter to 11.5 trillion KRW. This includes 9 trillion KRW in corporate loans, 2.3 trillion KRW in household loans, and 200 billion KRW in credit card receivables.
The balance of allowance for loan losses at the end of September (24.7 trillion KRW) increased by 900 billion KRW from 23.8 trillion KRW at the end of the previous quarter. However, due to the increase in non-performing loans, the allowance coverage ratio at the end of September (215.3%) fell by 11.1 percentage points compared to 226.4% at the end of the previous quarter.
Newly generated non-performing loans in the third quarter of this year amounted to 4.3 trillion KRW, up 300 billion KRW from 4 trillion KRW in the previous quarter. This is an increase of 1.8 trillion KRW compared to 2.5 trillion KRW in the same period last year.
New non-performing corporate loans totaled 3.1 trillion KRW, up 300 billion KRW from 2.8 trillion KRW in the previous quarter.
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New non-performing household loans were 1.1 trillion KRW, similar to 1 trillion KRW in the previous quarter. The amount of non-performing loans resolved in the third quarter was 3.3 trillion KRW, down 600 billion KRW from 3.9 trillion KRW in the previous quarter. This is an increase of 300 billion KRW compared to 3 trillion KRW in the same period last year.
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