SEOUL, July 20 (Reuters) - The loan delinquency ratio of
South Korean banks slid to a six-month low in June, with
improvement in company cash flows and after banks wrote off and
sold a chunk of problem loans, a regulator said on Monday.
The ratio of delinquent loans was a preliminary 1.19 percent of total won-currency lending at the end of June, down sharply from 1.60 percent in June and the lowest reading since 1.08 percent in December 2008, the Financial Supervisory Service said in a statement.
For lending to small and medium-sized companies, the ratio tumbled to 1.86 percent at the end of last month, versus 2.57 percent in May.
Analysts said the pace of new delinquency loan formation would continue to slow with signs of economic recovery, but rising unemployment rate and ongoing corporate restructuring led by banks could spell a risk for the banking sector.
Following are bank delinquency ratios by loan types:
(in percent)
June May Apr Mar Dec 2008 June 2008
Large firms 0.82 0.85 0.66 0.70 0.34 0.30
SMEs 1.86 2.57 2.59 2.33 1.70 1.14
Household loans 0.59 0.78 0.75 0.73 0.60 0.52
Total 1.19 1.60 1.58 1.45 1.08 0.79
(Reporting by Kim Yeon-hee; Editing by Alex Richardson)
((yeonhee.kim@thomsonreuters.com; +82 2 3704 5646; Reuters Messaging: yeonhee.kim.reuters.com@reuters.net)) Keywords: KOREA BANKS/DELINQUENCY (If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The ratio of delinquent loans was a preliminary 1.19 percent of total won-currency lending at the end of June, down sharply from 1.60 percent in June and the lowest reading since 1.08 percent in December 2008, the Financial Supervisory Service said in a statement.
For lending to small and medium-sized companies, the ratio tumbled to 1.86 percent at the end of last month, versus 2.57 percent in May.
Analysts said the pace of new delinquency loan formation would continue to slow with signs of economic recovery, but rising unemployment rate and ongoing corporate restructuring led by banks could spell a risk for the banking sector.
Following are bank delinquency ratios by loan types:
(in percent)
June May Apr Mar Dec 2008 June 2008
Large firms 0.82 0.85 0.66 0.70 0.34 0.30
SMEs 1.86 2.57 2.59 2.33 1.70 1.14
Household loans 0.59 0.78 0.75 0.73 0.60 0.52
Total 1.19 1.60 1.58 1.45 1.08 0.79
(Reporting by Kim Yeon-hee; Editing by Alex Richardson)
((yeonhee.kim@thomsonreuters.com; +82 2 3704 5646; Reuters Messaging: yeonhee.kim.reuters.com@reuters.net)) Keywords: KOREA BANKS/DELINQUENCY (If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.