At the end of November last year, the delinquency rate for won-denominated loans at domestic banks stood at 0.60%, showing a slight increase compared to the previous month. Despite a decrease in new delinquent occurrences, the delinquency rate continued to rise, particularly for SMEs and household credit loans.
According to the Financial Supervisory Service (FSS), the provisional delinquency rate for won-denominated loans at domestic banks at the end of November 2025 increased by 0.02 percentage points (P) from the end of the previous month (0.58%). This is 0.08%P higher compared to the same period last year (0.52%).
In November, the amount of newly occurred delinquencies was 2.6 trillion won, a decrease of 300 billion won from the previous month (2.9 trillion won). The scale of settling delinquent bonds was 1.9 trillion won, an increase of 600 billion won from the previous month (1.3 trillion won). The new delinquency rate dropped by 0.01%P to 0.11% compared to the previous month.
Delinquency rates for both corporate and household loans rose simultaneously.
The delinquency rate for corporate loans was 0.73%, up by 0.04%P from the end of the previous month (0.69%). The delinquency rate for large corporate loans increased by 0.02%P to 0.16%, and the delinquency rate for SME loans rose by 0.05%P to 0.89%.
Particularly, the delinquency rate for small corporate entities recorded 0.98%, rising by 0.05%P from the end of the previous month (0.93%), showing a noticeable upward trend. The delinquency rate for individual business loans increased by 0.04%P to 0.76%.
The delinquency rate for household loans was 0.44%, up by 0.02%P from the end of the previous month (0.42%). The delinquency rate for mortgage loans increased by 0.01%P to 0.30%, while the delinquency rate for household loans excluding mortgage loans, such as credit loans, rose by 0.05%P to 0.90% compared to the end of the previous month (0.85%).
The FSS explained that delinquency rates tend to rise during the quarter and fall at the end of the quarter.
An FSS official stated, “Despite the decrease in newly occurred delinquent bonds and the increase in the management scale of delinquent bonds, the delinquency rate slightly increased,” and added, “We will closely monitor the stability to ensure the delinquency rate in the banking sector is managed at a stable level.”
The official continued, “The plan is to encourage domestic banks to strengthen asset soundness management through actions like sell-offs of bad debt and to secure ample loss absorption capacity through the accumulation of loan loss provisions.”
Reporter: Taewoong Ryu, bigheroryu@etnews.com