South Korean banks see real estate loan delinquency rates hit 10‑year highs

In the second quarter of 2024, Korean banks reported a sharp rise in delinquency rates on loans to the real‑estate and leasing sectors. IBK Industrial Bank of Korea recorded a 1.54 % delinquency rate – the highest since the 2012 Q3 quarter and a 14‑year peak. Major commercial banks also posted decade‑high figures: Shinhan Bank’s rate rose to 0.42 % (the highest since the sector‑wise data began in 2021), Woori Bank to 0.62 % (its highest since the first quarter of 2016), and Hana Bank to 0.57 % (a ten‑year high). KB Kookmin Bank was the sole outlier, with its rate falling to 0.16 %. Across all corporate loans, the overall delinquency rate stood at 0.98 %.

The surge is attributed to prolonged high‑interest rates and a slowdown in the commercial‑property market, which have strained borrowers, especially small‑scale landlords and developers. The Bank of Korea has classified the real‑estate sector as a “caution industry” in its recent financial stability report, noting the sector’s large exposure and higher-than‑average delinquency levels, and urging tighter asset‑quality management by banks.