IBK Industrial Bank of Korea SME long-term delinquencies surge sixfold

Long-term delinquency in small and medium-sized enterprise (SME) loans at IBK Industrial Bank of Korea has surged significantly. As of July, loans overdue by more than one year reached 567.8 billion won, a sixfold increase compared to 94.2 billion won at the end of 2022.

The number of long-term delinquent borrowers also rose sharply, growing from 237 companies in late 2022 to 1,908 companies by July. This represents an eightfold increase in the number of affected entities.

Data provided to National Assembly member Park Seong-hun indicates that the growth rate of long-term delinquencies is outpacing the growth of total SME loan delinquencies. Total SME loan delinquencies reached 2.959 trillion won in July, nearly four times the amount recorded at the end of 2022.

Furthermore, the volume of loans overdue for six months to one year has increased nearly 12-fold since late 2022, reaching 523.7 billion won. Combined, loans overdue for six months or longer total 1.0915 trillion won, accounting for 36.9% of the bank's total SME loan delinquency amount. This trend raises concerns regarding the potential for temporary liquidity issues to solidify into long-term insolvency for SMEs.