Bank loan and credit card delinquents keep on rising

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Bank loan and credit card delinquents keep on rising


The debt crisis continues to grow as the number of delinquent borrowers rises.

The number of delinquent borrowers spiked nearly 50 percent in June compared to three years ago when the U.S. financial crisis affected Korea, according to data by the Financial Supervisory Service submitted to Democratic United Party Representative Chyung Ho-joon in an ongoing parliamentary inspection yesterday.

The data showed the number of delinquent borrowers at six major banks - Shinhan Bank, Woori Bank, Hana Bank, Korea Exchange Bank, Citi Bank and KB Kookmin Bank - increased to 252,049 as of June this year, up 46 percent from the 172,087 recorded in 2009.

In Korea, a person is automatically registered as a delinquent at the Korea Federation of Banks after failing to pay back loan payments for over three months.


Despite the Lee Myung-bak administration’s attempts?to curb the nation’s snowballing household debt, delinquents have been rising for four straight years at a rate of between 20,000 and 30,000 per year.

The number of new loan borrowers who became delinquents as of the first half of this year was 60,572. Market analysts said the figure was getting close to the annual average of 70,349 new borrowers who became delinquents from 2009 to 2011.

KB Kookmin Bank had the highest number of delinquents in the first half of the year, 119,358, followed by Woori Bank’s 45,826, Shinhan Bank’s 39,722, Hana Bank’s 30,166, Citibank’s 12,966 and Korea Exchange Bank’s 4,011.

“Some people have a hard time these days due to the fall in real estate prices, but the pain for people who have borrowed under 10 million won [$9,000] to pay education and medical fees is even greater,” Chyung said during the parliamentary inspection yesterday.

Separately, data that the financial watchdog submitted to the National Assembly’s National Policy Committee showed the number of delinquent credit card borrowers from 2009 to 2011 reached 488,000, with the overdue amount totaling 2.51 trillion won.The number of defaulting credit card users at seven independent credit card companies - BC Card, Shinhan Card, Samsung Card, Hyundai Card, Lotte Card, Hana SK Card and KB Kookmin Card - reached 176,000 last year alone, up nearly 30 percent from 40,000 in 2010, according to the data.

“The number of credit card borrowers on default will get bigger if we include credit card units run by banks, which make up 30 percent of the credit card market,” Chyung said.

By Kim Mi-ju []
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