Banks' bad loans fall in Q2 on efforts to clear bad debt

Non-performing loans at South Korean banks fell 0.13 percentage point in June from three months earlier, as banks bolstered efforts to clear bad debt, official data showed Wednesday.

Bad loans held by local banks reached 21.8 trillion won ($19.2 billion) at the end of June, or 1.25 percent of total lending, according to the quarterly data by the Financial Supervisory Service. 

Bad loans extended to businesses reached 20 trillion won at the end of June, accounting for 91.7 percent of total non-performing loans, according to the latest data.

Although the overall ratio has been on a steady decline, the bad-loan ratio for the shipbuilding and shipping sectors stood at 11.97 percent and 4.79 percent each at the end of June, it said.

The regulator said it will keep monitoring and supervising bad loans as there is a possibility that bad debt could jump as market interest rates go up. (Yonhap)