South Korea bank loan delinquency rate climbs to 0.61% in April

The Financial Supervisory Service reported that the delinquency rate on South Korean won‑denominated bank loans rose to 0.61% in April, up 0.05 percentage points from March and 0.04 points from a year earlier. New delinquent balances increased to 2.9 trillion won, while the amount of loan write‑offs fell sharply to 1.6 trillion won.

All loan categories showed higher arrears: corporate loan delinquency rose to 0.74% (up 0.06 p.p.), with small‑business loans up to 0.90% (up 0.09 p.p.) while large‑corporate loan delinquency stayed around 0.22%. Household loan delinquency reached 0.42% (up 0.02 p.p.). Mortgage loan delinquency was stable at 0.30%, but non‑mortgage household credit delinquency rose to 0.83% (up 0.07 p.p.).

Regulators highlighted persistent high inflation, exchange‑rate pressures and rising market rates as sources of economic uncertainty. They called for banks to strengthen loan‑loss provisions, expand loss‑absorption capacity and actively support vulnerable borrowers through debt‑restructuring measures.