banks-bad loans
Banks' asset health improves with bad loans down in Q1
SEOUL, June 2 (Yonhap) -- South Korean banks' nonperforming loans declined in the first quarter of this year, indicating an improvement in their overall asset soundness, data showed Thursday.
Bad loans at local banks stood at 10.8 trillion won (US$8.6 billion) at the end of March, down 1 trillion won, or 8.1 percent, from three months earlier, according to the preliminary data from the Financial Supervisory Service (FSS).
The ratio of their bad loans to outstanding credit fell 0.05 percentage point to 0.45 percent. The ratio was also down 0.17 percentage point from a year earlier.
The bad loans refer to lending with interest payments overdue for three months or longer.
Of the total nonperforming loans, corporate lending made up 9.2 trillion won, while household credit totaled 1.5 trillion won, the data showed.
As of end-March, banks' loan loss reserves stood at 181.6 percent, up 15.7 percentage points from three months earlier. They were also 44.3 percentage points higher than a year earlier.
The FSS said banks' asset health has been improving as indicated by those latest figures, but it will continue to induce them to strengthen their shock-absorbing capabilities as market volatility could intensify amid worries over recent spikes in borrowing costs and a possible economic slowdown.
(END)
(C) Yonhap News Agency. All Rights Reserved
