In April, the delinquency rate for domestic banks' won-denominated loans increased due to a rise in new delinquencies and a decrease in the resolution of delinquent loans.
According to the Financial Supervisory Service's report on the status of won-denominated loan delinquencies released on June 18, the delinquency rate for these loans stood at 0.61% at the end of April, up 0.05 percentage points from March's rate of 0.56%. This figure also represents a 0.04 percentage point increase compared to the same month last year, when it was 0.57%.
The banking sector's delinquency rate peaked at 0.62% in February, the highest in nine months, before dropping to 0.56% in March due to an increase in the resolution of non-performing loans. However, it rebounded in April.
In April, the amount of new delinquencies reached 2.9 trillion won, an increase of 200 billion won from March's 2.7 trillion won. Meanwhile, the resolution of delinquent loans decreased significantly to 1.6 trillion won, down 2.7 trillion won from the previous month's 4.3 trillion won.
By sector, the delinquency rate for corporate loans rose to 0.74%, up 0.06 percentage points from the previous month. Among these, the delinquency rate for small and medium-sized enterprise (SME) loans increased to 0.9%, a rise of 0.09 percentage points from March's 0.81%. The delinquency rate for small corporations within SMEs rose by 0.1 percentage points to 0.98%, while the rate for individual business loans increased by 0.07 percentage points to 0.78%.
The delinquency rate for large corporate loans remained stable at 0.22%, but it was up 0.09 percentage points from 0.13% in the same month last year.
The delinquency rate for household loans increased to 0.42%, up 0.02 percentage points from March's 0.40%. Within this category, the delinquency rate for mortgage loans rose to 0.3%, an increase of 0.01 percentage points, while the rate for credit loans and other household loans climbed by 0.07 percentage points to 0.83%.
The Financial Supervisory Service stated, "Amid ongoing high inflation and exchange rates due to the situation in the Middle East, uncertainties in the domestic and international economy persist, including rising market interest rates. We plan to strengthen monitoring of delinquency rates and new delinquency trends and encourage banks to enhance their proactive loss absorption capabilities."
They added, "We will actively support vulnerable borrowers at risk of delinquency through banks' own debt restructuring efforts."
* This article has been translated by AI.
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