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LENDING & CREDIT | Cesar Tordesillas, Korea
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Bad loan ratio rises in April for S. Korea's banks

A rise in fresh loan delinquency numbers brought the bad loan ratio up in April for banks in South Korea.

 

This was caused by the sluggish economy and weak property market, the country's Financial Supervisory Service said.

Local banks' non-performing loans accounted for 1.21 percent of their total lending as of the end of April, up 0.12 percentage point from a month earlier, according to the FSS.

It said there was a 700 billion won increase in new bad loans along with an overall rise in outstanding delinquent loans, which rose to 13.1 trillion won from 11.7 trillion won recorded the previous month.

Local banks were also able to resolve 1.9 trillion won worth of bad loans last month compared to 2.9 trillion won in March.

The latest report showed the delinquency ratio for both corporate and household loans went up.

The delinquency rate for corporate loans stood at 1.49 percent last month, a 0.17 percentage point gain on a month prior, with the comparable figure for household loans edging up 0.05 percentage point to 0.89 percent.

The data comes as Seoul moves to control loans to the private sector that could destabilize Asia's fourth-largest economy.

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