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Delinquency rate on local bank loans increases in October

Published: 13 Dec. 2024, 10:22

People walk past a sign about a bank's loan programs put up on the exterior of a lender in Seoul. [NEWS1]

The delinquency rate on loans extended by local banks rose in October due mainly to a fall in the amount of soured loans written off by lenders, data showed Friday.

The delinquency rate on banks' won-denominated loans increased 0.03 of a percentage point from a month earlier to 0.48 percent as of the end of October, compared to a 0.08 percentage-point drop in September, according to preliminary data from the Financial Supervisory Service (FSS).

The amount of newly delinquent loans came to 2.5 trillion won ($1.75 billion) in October, unchanged from the previous month.

But the amount of write-offs of bad loans sank by 2.6 trillion won during the cited period, the data showed.

The delinquency rate on corporate loans stood at 0.56 percent at the end of October, up 0.04 of a percentage point from a month before.

The rate on household loans also rose 0.02 of a percentage point to 0.38 percent over the cited period, the FSS said.

"The policy rate cut is expected to ease the interest payment burdens of borrowers down the road. But recent uncertainties at home and abroad would affect vulnerable people," an FSS official said, vowing efforts to minimize such impacts through various policy measures.

Earlier this month, the Bank of Korea slashed its key rate by 25 basis points to 3.0 percent, following a quarter percentage-point rate cut a month earlier, amid deepening concerns about an economic slowdown.

Yonhap