South Korea's domestic banks reported an increase in the ratio of loans classified as substandard or below (SBLs) to total outstanding loans, which reached 0.53 per cent at the end of June 2024. This marks a slight rise of 0.03 percentage points from 0.50 per cent three months earlier. In terms of value, SBLs expanded from 13.4 trillion won in the previous quarter to 14.4 trillion won, reflecting a quarter-on-quarter increase. Business loans classified as SBLs contributed significantly to this total, amounting to 11.6 trillion won. Additionally, household loans and credit card receivables classified as SBLs stood at 2.6 trillion won and 0.2 trillion won, respectively, as of the end of June. Despite the rise in SBLs, total provisions for bad debts decreased slightly, shrinking by 0.1 trillion won from 27.2 trillion won to 27.1 trillion won by the end of June 2024. The provision coverage ratio saw a significant quarterly drop of 15.1 percentage points, falling from 203.1 per cent to 188.0 per cent. Attribution: Financial Supervisory Service report Subediting: Y.Yasser Download
