▲ Bank
The delinquency rate on won-denominated loans by domestic banks hit a 10-year high as of the end of June.
According to the Financial Supervisory Service on the 21st, the delinquency rate on won loans by domestic banks (based on principal and interest overdue for one month or more) stood at 0.56% at the end of June, up 0.04 percentage points (p) from the same month last year.
This is the highest for the same month since June 2016, when it recorded 0.71%.
However, compared to the end of the previous month (0.67%), it fell by 0.11 percentage points.
The delinquency rate rose for two consecutive months from 0.56% at the end of March before easing in June, which is generally attributed to banks strengthening the management of delinquent loans at the end of the quarter.
During June, new delinquencies amounted to 2.6 trillion won, down 700 billion won from the previous month, while the scale of troubled loan disposals surged by 3.8 trillion won to 5.3 trillion won.
The new delinquency rate was 0.10%, down 0.03 percentage points from the previous month and 0.01 percentage points from a year earlier.
By sector, the corporate loan delinquency rate also fell compared to the previous month, but rose sharply compared to a year earlier.
The corporate loan delinquency rate at the end of June was 0.68%, up 0.08 percentage points from the same month last year.
Compared to the previous month, it dropped by 0.16 percentage points.
Large corporate loans stood at 0.22% and small and medium-sized enterprise (SME) loans at 0.82%, each rising 0.08 percentage points from a year ago.
The delinquency rate for small businesses (corporates) rose 0.13 percentage points from the same month last year to 0.92%, also recording the highest for the month of June since 2016 (0.94%).
It fell 0.19 percentage points from the previous month.
The delinquency rate for sole proprietors stood at 0.69%, up 0.03 percentage points from a year earlier.
It fell 0.15 percentage points compared to the previous month.
On the other hand, the household loan delinquency rate dropped 0.01 percentage points from the same month last year to 0.40%.
Compared to the previous month, it declined by 0.05 percentage points.
The mortgage delinquency rate dropped 0.02 percentage points from a year earlier to 0.28%, while household loans excluding mortgages, such as credit loans, fell 0.01 percentage points to 0.77%.
The Financial Supervisory Service explained, "Considering economic uncertainties such as the global trend of rising interest rates and the prolonged situation in the Middle East, delinquency rates could potentially rebound in the future."
It added, "We will monitor the soundness of the banking sector and ensure that banks strengthen management by proactively expanding loss-absorbing capacities and writing off or selling off non-performing loans."
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