South Korean banks’ bad loans ratio up in October

The proportion of bad loans rose whilst resolved loans decreased by around US$1.29b.

The delinquency rate of South Korean domestic banks’ won-denominated (WD) loans rose to 0.43% as of end-October, according to data released by the Financial Supervisory Service (FSS) in December 2023.

This is 0.04 percentage point (ppt) higher than September, and 0.19 ppt higher than in October 2022, the FSS said.

The delinquency rate is classified as the percentage of loans with principal of interest payment past due by at least one month.

The delinquency rate of loans to large companies rose to 0.19% in October, from only 0.14% in September.

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The rate of loans to SMEs rose to 0.55%, 0.06ppt higher than 0.49% a month earlier.

When it came to household loans, the delinquency rate was 0.37% by end-October, up 0.02 ppt from a month earlier, the FSS said.

The volume of resolved loans decreased by approximately US$1.29b (KRW1.7) between September and October, whilst that of newly delinquent loans grew approximately US$759m (KRW0.2t).