Delinquency Rate Drops by 0.05%p in March... New Delinquencies Up 100 Billion Won

Delinquency Rate for Won-Denominated Loans at Domestic Banks: 0.53%
Large Corporate Loan Delinquency Rate Rises
SME and Individual Business Owner Loan Delinquency Rates Fall

In March, the delinquency rate for domestic banks' loans in South Korea decreased slightly by 0.05 percentage points. This contrasts with the previous month, February, when the rate had reached its highest level in six years and three months. The amount of newly delinquent loans increased by 100 billion won.

According to the Financial Supervisory Service on May 21, as of the end of March, the delinquency rate for Korean won-denominated loans at domestic banks (based on loans overdue by more than one month) was 0.53%, down 0.05 percentage points from the end of the previous month. Typically, banks' quarterly delinquency rates tend to rise during the quarter and then fall at the end of the quarter due to strengthened management of delinquent loans.

In terms of amount, the newly delinquent loans in March totaled 3 trillion won, an increase of 100 billion won compared to the previous month. The amount of delinquent loans resolved (through write-offs or sales) was 4.8 trillion won, up 2.3 trillion won from February.

By sector, only the delinquency rate for large corporate loans increased. The delinquency rate for large corporations was 0.11%, up 0.01 percentage points from the previous month. In contrast, the delinquency rate for small and medium-sized enterprise (SME) loans fell by 0.08 percentage points to 0.76%. Within SMEs, the delinquency rate for small corporations dropped by 0.10 percentage points, and for individual business owner loans, it fell by 0.05 percentage points.

The delinquency rate for household loans was 0.41%, down 0.02 percentage points from the previous month. The delinquency rate for mortgage loans was 0.29%, similar to the previous month. Excluding mortgages, the delinquency rate for household loans was 0.79%, down 0.10 percentage points from the previous month.

The Financial Supervisory Service stated, "As of the end of March, the delinquency rate fell compared to the previous month, despite an increase in new delinquencies, due to the expanded resolution of delinquent loans at the end of the quarter." The agency also explained, "It is necessary to prepare for the possibility that the delinquency rate may continue to rise due to increased domestic and international uncertainties."

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