Banks' loan delinquency rate rebounds in April

The delinquency rate for South Korean banks' won-denominated loans rebounded in April from a record low the previous month as lenders cleared smaller amounts of bad debts, the financial watchdog said Wednesday.

The rate for bank loans more than 30 days overdue stood at 0.3 percent at the end of April, up 0.02 percentage point from an all-time low of 0.28 percent the previous month, according to the Financial Supervisory Service (FSS).

Compared with a year earlier, the banks' loan delinquency rate was down 0.1 percentage point.

The rebound in the delinquency rate came as banks usually dispose of larger amounts of bad debts at the end of each quarter to improve their quarterly balance sheets.

In April, local banks cleared bad debts worth 600 billion won ($536.7 million), down 1.1 trillion won from a month earlier, the FSS said.

Banks' loan delinquency rate remains stable mainly because the government has encouraged local lenders to extend loan maturity or delay interest payments to help households and firms struggling to cope with the economic fallout of the pandemic.

The delinquency rate for corporate loans rose 0.03 percentage point on-month to 0.4 percent in April, and the corresponding figure for household loans gained 0.01 percentage point to 0.19 percent. (Yonhap)