According to the Financial Supervisory Service's report on the status of non-performing loans in domestic banks released on May 29, the non-performing loan ratio at the end of the first quarter of this year was 0.60%, up 0.03 percentage points from the previous quarter's 0.57%. Compared to the same period last year (0.59%), it increased by 0.01 percentage points, marking the highest level since March 2021 (0.62%).
The total amount of non-performing loans reached 17.7 trillion won, an increase of 1.1 trillion won from the previous quarter. Corporate loans accounted for the largest share at 14.2 trillion won, while household loans totaled 3.3 trillion won, and credit card debts amounted to 300 billion won.
By sector, the non-performing loan ratio for corporate loans rose to 0.74%, up 0.04 percentage points from the previous quarter. Among these, the non-performing loan ratio for small and medium-sized enterprises increased to 0.88%, up 0.05 percentage points, while the ratio for individual business loans rose to 0.66%, an increase of 0.09 percentage points.
The non-performing loan ratio for household loans also increased to 0.32%, up 0.01 percentage points from the previous quarter. Mortgage loans recorded a ratio of 0.22%, while other credit loans stood at 0.66%.
In the first quarter, the amount of non-performing loans resolved was 4.4 trillion won, a decrease of 1.3 trillion won from the previous quarter. The Financial Supervisory Service explained that the rise in the balance and ratio of non-performing loans was influenced by a decrease in the volume of sales and transfers.
The reserve ratio for loan loss provisions continued to decline. As of the end of March, the reserve ratio was 150.4%, down 9.9 percentage points from the previous quarter's 160.3%. This trend follows a significant accumulation of loan loss provisions during the COVID-19 pandemic.
However, the amount of newly generated non-performing loans in the first quarter decreased slightly. New non-performing loans totaled 5.5 trillion won, down 400 billion won from the previous quarter. New corporate loan defaults were 4.1 trillion won, a decrease of 300 billion won, while new household loan defaults also fell to 1.3 trillion won, down 100 billion won.
The Financial Supervisory Service stated, "Considering the ongoing domestic and international uncertainties, we will closely monitor the trends in non-performing loan ratios and delinquency rates. We plan to check the reserve status of each bank and encourage active sales and transfers of non-performing loans."
It added, "We will ensure that there are no unfair infringements on the rights of individual debtors during the process of managing the banks' soundness."
* This article has been translated by AI.
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