The default rate on loans extended by South Korean insurance companies inched up in the third quarter from three months earlier, due mainly to a rise in overdue corporate loans, the financial watchdog said Friday.
The average ratio of overdue loans came to 1.18 percent of total lending by local life and non-life insurers as of end-September, up 0.09 percentage point from the end of June, the Financial Supervisory Service (FSS) said in a report.
The September figure marked a rebound after hitting the lowest level at the end of June since the onset of the 2008 global financial crisis.
The default rate of household loans reached 0.75 percent, down
0.05 percentage point from three months earlier, while the reading for corporate loans jumped 0.42 percentage point to 2.19 percent.
The FSS attributed the rise in overdue corporate loans to a surge in small and mid-size enterprises' loan default rate. The figure soared 0.66 percentage point to 3.25 percent.
The insurers had a combined 95.5 trillion won (US$84.2 billion) of lending to companies and households as of the end of the third quarter, according to the FSS. The figure accounts for around 17.5 percent of their 546 trillion won assets as of the end-September. (Yonhap News)
