S. Korea reports 15-month high bank loan delinquency rate in August

17:04, September 27, 2010      

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South Korean banks reported a 15- month high loan delinquency rate in August mainly due to an increase in corporate borrowers' late repayment, the financial regulator said Monday.

According to the Financial Supervisory Service (FSS), the preliminary August delinquency ratio for domestic banks'loans, whose principal payments are overdue by more than one day, was 1.5 percent.

The figure was a 0.23 percentage point advance from 1.27 percent in July, also marking the highest level since May 2009 when it hit 1.6 percent, said the FSS.

The gain came on the back of temporary rising of delinquent loans following the announcement of the credit risk evaluation results on large companies, the FSS said in a press release, adding it had to do with seasonal factors.

Also added to the increase were new delinquent loans in areas of weakness such as construction, real estate and shipbuilding industry, the FSS said.

As of end-August, the delinquency ratio for corporate loans was 2.07 percent, up from 1.75 percent at the end of July, while the August household loan delinquency ratio was 0.78 percent, up from 0.67 percent in July, said the watchdog.

Source: Xinhua


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