South Korean bank delinquencies hit 0.6% with SMEs hit hardest

Volume of newly delinquent loans shrank whilst resolved loans rose.

The delinquency rate of South Korean banks’ won-denominated loans rose for the second-straight month in November 2025 as businesses and households saw an increase in bad loans.

Delinquency rate rose to 0.6% as of end-November 2025, a 0.02 percentage point (ppt) increase from the previous month, and 0.08 ppt higher than a year earlier, according to data from the Financial Supervisory Service (FSS), released on 28 January 2026.

Despite the higher rate, the volume of newly delinquent loans shrank during the month at KRW0.3t, whilst the volume of resolved loans rose by KRW0.6t.

Large companies, small and medium enterprises (SMEs), and households all saw delinquency rates rise during the period.

Delinquency rate on loans to large companies climbed to 0.16% from 0.14% previously, whilst the rate of loans to SMEs increased to 0.89% or 0.5 ppt higher during the period.

Household loans, meanwhile, saw delinquency rates rise by 0.02 ppt to 0.44% in November, FSS data showed.

In December, bank lending in South Korea to both households and the corporate sector declined, with the sector recording lower mortgage loans taken out.