February Bank Won Loan Delinquency Rate at 0.25%... Up 0.02%P from Previous Month

by Song Hwajung

Published 14 Apr.2022 12:00(KST)

February Bank Won Loan Delinquency Rate at 0.25%... Up 0.02%P from Previous Month

[Asia Economy Reporter Song Hwajeong] At the end of February, the delinquency rate on won-denominated loans at domestic banks continued a slight upward trend for the second consecutive month, reaching 0.25%.

According to the Financial Supervisory Service on the 14th, the delinquency rate on won-denominated loans at domestic banks (based on principal and interest overdue by more than one month) was 0.25% at the end of February, up 0.02 percentage points from 0.22% at the end of the previous month. Compared to the same period last year, it decreased by 0.08 percentage points. The delinquency rate typically rises during the quarter as banks strengthen management of overdue loans at the end of the quarter, then tends to fall at the quarter's end. The delinquency rate at domestic banks has fluctuated slightly around the 0.2% level since falling to the 0.2% range in June last year.

The amount of newly occurred delinquencies in February was 900 billion KRW, an increase from 800 million KRW in the previous month, while the amount of resolved delinquent loans was 500 billion KRW, similar to the previous month.

By sector, the delinquency rate on corporate loans rose 0.02 percentage points to 0.30% from 0.28% at the end of the previous month. The delinquency rate on large corporate loans fell 0.01 percentage points to 0.23% compared to the previous month. The delinquency rate on small and medium-sized enterprise (SME) loans increased 0.03 percentage points to 0.32%, SME corporate delinquency rose 0.04 percentage points to 0.42%, and delinquency on individual business owner loans increased 0.02 percentage points to 0.20%.

The delinquency rate on household loans rose 0.02 percentage points to 0.19% compared to the previous month. The delinquency rate on mortgage loans increased 0.01 percentage points to 0.11%, while the delinquency rate on household loans excluding mortgage loans (such as credit loans) rose 0.04 percentage points to 0.37%.