South Korean banks’ bad loans rise 0.23% in January

Bad loans to SMEs are on an uptick.

South Korean banks’ delinquency rate of won-dominated loans rose to 0.23% in January 2022, up 0.02 percentage points from the month prior, according to data released by the local regulator.

Whilst the amount of newly delinquent loans remained the same as in December 2020, the number of resolved loans decreased by over $979m (KRW1.2t), which contributed to the uptick of the delinquency rate, said the Financial Supervisory Service.

The bad loan ratio of loans extended to large companies improved slightly, dropping to 0.24% in January.

But small and medium enterprises (SMEs) are increasingly feeling the pressure, with the rate of bad loans rising to 0.29% in January from 0.27% in December 2020.

Household loans’ delinquency ratio rose 0.02 percentage points to 0.17%.