Loan delinquency among South Korean banks is lesser in September due to a reduction in new delinquent loans and massive resolution of existing overdue loans.
Korea's Financial Supervisory Service stated that the rate of bad loans, which were overdue for more than one day, against the total banks loans to companies and households stood at 1.04 percent as of the end of September, reports Xinhua News.
This represents a 0.18 percentage point deduction from a month earlier, causing the delinquency ratio to go down for the first time in three months in September.
The September decline came as local banks rushed to massively clean up overdue loans ahead of quarterly book closing. The decrease in new delinquent loans also contributed to the fall in delinquency.
New delinquent loans amounted to 1.8 trillion won or 1.62 billion U.S. dollars as of the end of September, down 0.6 trillion won from a month before, while overdue loans resolved grew 2.3 trillion won on-month to reach 3.6 trillion won.
The delinquency ratio of banks' corporate lending came in at 1.33 percent in September, down 0.25 percentage point from a month before. On the other hand, the delinquency ratio of banks' household lending stood at 0.71 percent as of the end of September, down 0.09 percentage point from the previous month.
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