BNK Kyongnam Bank faces rising non-performing loan pressure

BNK Kyongnam Bank is facing increased pressure regarding asset quality management as its non-performing loan (NPL) ratio rose to 1.09%, an increase of 0.33 percentage points over the past year. This rise is attributed to the bank's high proportion of loans to local small and medium-sized enterprises (SMEs), which are heavily impacted by the regional economic downturn.

According to data from the Financial Supervisory Service, the bank's loan loss provision coverage ratio fell significantly to 74.4%, down from 87.1% in the previous quarter and 108.9% in June of last year. This rate is the lowest among major regional banks in South Korea. The bank noted that the decline was partly due to an increase in non-performing loans backed by real estate collateral, which typically has higher recovery value. To address these issues, the bank plans to actively pursue the sale and write-off of non-performing loans to improve its asset quality indicators.