Delinquency ratio on loans hits 30-month high
The delinquency ratio on loans extended by banks in Korea hit a 30-month high in February, as borrowers are under pressure from rate hikes, data showed Tuesday.The delinquency ratio on banks' won-denominated loans came to 0.36 percent as of end-February, up 0.05 percentage point from a month earlier and 0.11 percentage point from a year earlier, according to the preliminary data from the Financial Supervisory Service (FSS).
The figure was the highest since the delinquency ratio hit 0.38 percent in August 2020.
The financial burden on many small and medium-sized enterprises (SMEs) and households seems to have increased as the Bank of Korea (BOK) pushed for sharp rate hikes last year to combat rising inflation, an FSS official said.
The BOK raised the country's key interest rate seven straight times from 1.25 percent to 3.5 percent until it froze the rate in February.
The delinquency rate on loans taken out by SMEs went up 0.08 percentage point on-month to 0.47 percent in February, and the figure for household loans rose by 0.04 percentage point to 0.32 percent.
From a year earlier, the past due rate on loans by SMEs was up 0.15 percentage point and that of household loans up 0.13 percentage point.
The delinquency rate on loans to large companies remained the same as a month ago at 0.09 percent.
Yonhap
with the Korea JoongAng Daily
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