South Korean SME lending slumps as bad loan write-offs slash June growth

Bank lending to large corporations rose slower in June, central bank data showed.

South Korea’s bank lending to the corporate sector grew by a smaller margin as loans extended to small businesses slowed.

Bank lending to small and medium enterprises (SMEs) rose by a smaller margin of $1.13b (KRW1.7t) in June, compared with the KRW5.4t increase in May, data from the Bank of Korea (BOK) showed.

This was mainly due to sales and write-offs of non-performing loans (NPLs) as well as reduced lending by some specialized banks, the central bank said.

Bank lending to large corporations rose by $2.26b (KRW3.4t) during the month, slower from the $3.45b (KRW5.2t) a month earlier.

The BOK noted continued lending efforts by banks, as well as corporate demand for working capital, which more than offset temporary loan repayments that companies do for financial ration management for the half-year period.

Deposits taken in by banks rose by $19.1b (KRW28.8t) in June, slowing from the $32.37b (KRW48.8t) in deposits that the banks took in the previous month.

Transferable deposits increased by $8.09b (KRW12.2t).

Time deposits rose by $9.42b (KRW14.2t) during the same period, as some banks attracted corporate funds to secure funding for lending, despite continued withdrawals of household deposits, the BOK said.

(US$1 = KRW 1,507.81. As of 13 July 2026)