, Korea

South Korean banks’ bad loan ratio hits record low in Q

Ratio of bad loans to total lending came at only 0.62% as of end-March.

The non-performing loan ratio at South Korean banks declined to a record low in Q1, driven by a drop in overdue corporate loans, reports Yonhap, based on data from the Financial Supervisory Service.

The ratio of bad loans to total lending came to 0.62% at the end of the first quarter, down 0.02 percentage point (ppt) from Q4 2020 and 0.16 ppt from Q1 2020, data showed.

This is thanks to overdue lending to companies being lower in Q1. During the first quarter, this only reached $1.6b (KRW1.8t), or KRW700b lower from three months earlier.

Outstanding amount of bad debt amounted to about $12.4b (KRW13.8t) as of end-March, or KRW100b lower compared to Q4 2019.

Despite the improvement, local corporates are still notedly in trouble, with overdue corporate loans totalling $10.9b (KRW11.9t)—that is, 87% of all total non-performing loans as of end-March.

Photo courtesy of Sava Bobov (Unsplash)

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Get Asian Banking & Finance in your inbox
It carries an annual interest rate of 1.25%.
CBIRC also warned against emerging local real estate bubbles.
Mortgages and credit card demand rose, whilst unsecured credit hit a historical low.
The bank will test the feature with retail and corporate clients for 12 months.
This is to ensure that troubled financial institutions won't end up needing costly bailouts.
CEO Wong joins as executive director, and a retired EY partner also joins the board.
The event will bring together experts from LexisNexis Risk Solutions and the city’s leading financial players.
Cashfree processes $20b worth of transactions annually.
Parent DigibankASIA will work alongside partners Mambu, Backbase, and AWS in developing its services.
And UBS' new digital wealth management platform pulls $3.7b in first year.
The respondents are accused violating banking, cybercrime and e-commerce laws.
New customers may choose between the original black, as well as the new lilac and silver designs.
Wong protege David Liao and India’s Surendra Rosha are rumored to become co-heads.
Ratio of bad loans to total lending came at only 0.62% as of end-March.
The country hit a record for fintech investments last year, and more is expected, says MAS’ Mohanty.