In March, the amount of overdue loans in domestic banks increased by 3 trillion won. As banks settled 4 trillion won worth of overdue loans, the delinquency rate slightly decreased.
According to the Financial Supervisory Service on the 21st, the delinquency rate for won-denominated loans in domestic banks as of the end of March (based on principal and interest overdue for more than one month) was 0.53%, a decrease of 0.05 percentage points from the previous month. This figure represents an increase of 0.10 percentage points compared to the same period last year.
The amount of new delinquencies in March was 3 trillion won, an increase of 100 billion won from the previous month (2.9 trillion won). The volume of settled overdue bonds in the banking sector recorded 4.1 trillion won, an increase of 2.3 trillion won from the previous month. Although the amount of new delinquencies increased, the delinquency rate declined as the amount of settled overdue bonds increased.
A representative from the Financial Supervisory Service stated, “It is common for the delinquency rate to drop significantly at the end of the quarter due to the expanded settlement of overdue bonds.”
Looking at the different sectors, the delinquency rate for corporate loans fell by 0.06 percentage points from the previous month to 0.62%. During this period, the delinquency rate for large companies rose by 0.01 percentage points to 0.11%, while that for small and medium-sized enterprises decreased by 0.08 percentage points to 0.76%. The delinquency rate for loans to individual business owners was 0.71%.
The delinquency rate for household loans dropped by 0.02 percentage points from the previous month to 0.41%. The delinquency rate for home mortgage loans was 0.29%, and that for household loans such as credit loans was 0.79%, respectively.
A representative from the Financial Supervisory Service added, “There is a need to prepare for the possibility of a continued rise in the delinquency rate due to increased internal and external uncertainties,” and emphasized, “We will strengthen asset soundness management through active settlement of overdue bonds and expansion of loan loss provisions.”