South Korean banks’ bad loans rise in August

The delinquency rate of SMEs and households rose during the month.

South Korean banks saw its bad loans ratio rise 0.06 percentage points (ppt) in August compared to a month earlier on the back of more newly delinquent loans.

The delinquency rate of domestic banks’ won-denominated loans stood at 0.53% as of end-August 2024, up from 0.47% recorded in end-July, according to data from the Financial Supervisory Service (FSS).

The ratio is also 0.1 ppt higher than in August 2024.

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

The delinquency rate on loans to large companies remained at 0.05%.

The rate on loans to small and medium enterprises (SMEs) climbed 0.11 ppt to 0.78% between July and August.

Household loans’ delinquency rate also increased to 0.4% in August, from 0.38% in July.

The FSS said that there were more newly delinquent loans in August, growing KRW 0.3t compared to July.

The number of resolved loans fell by KRW0.1t.