The level of late payments of banks recovered in April

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Corporate logos of the leading banks in South Korea (Yonhap)

Corporate logos of the leading banks in South Korea (Yonhap)

The rate of delinquency on loans denominated in South Korean banks’ won rebounded in April from a record low in the previous month as lenders paid off smaller amounts of bad debts, a financial observer said Wednesday.

According to the Financial Supervision Service (FSS), the rate on bank loans overdue more than 30 days was 0.3 percent at the end of April, up 0.02 percentage points from a record low of 0.28 percent in the previous month.

Compared to last year, the level of banks’ delinquencies decreased by 0.1 percentage points.

The rise in delinquency rates has occurred as banks typically get rid of large amounts of bad debt at the end of each quarter to improve their quarterly balance sheets.

Local banks paid off 600 billion won ($ 536.7 million) of bad debt in April, down 1.1 trillion won from a month earlier, the FSS said.

Bank delinquency rates remain stable, mainly as the government encouraged local lenders to extend loan maturities or delay interest payments to help households and companies struggling to cope with the economic fallout from the pandemic.

The level of delinquencies on corporate loans increased by 0.03 percentage points to 0.4 percent in April, while the corresponding figure for loans to individuals increased by 0.01 percentage points to 0.19 percent. (Yonhap)



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