Both corporate and household loan delinquency rates fell
Continued optical illusion effect of corona maturity extension
<대한금융신문=안소윤 기자> The Financial Supervisory Service announced on the 9th that as of the end of December last year, the Korean bank’s delinquency rate for loans in Korean won (delinquency of principal and interest for more than one month) was 0.28%, down 0.07 percentage points from the previous month.
This is the lowest since the statistics were prepared in 2007, and is 0.02 percentage points lower than the previous lowest (0.3% at the end of September last year). It is 0.09 percentage points lower than it was a year ago.
It is interpreted that the delinquency rate fell to the lowest level as the effect of the end of the quarter and the effect of the new coronavirus infection (Corona 19) policy overlapped with the existing decline in delinquency rates.
According to the Financial Supervisory Service, the amount of delinquency that occurred in December last year was 800 billion won, and the amount of delinquent debt settlement was 2.1 trillion won.
Looking at the delinquency rate by borrower, the corporate loan delinquency rate (0.34%) fell 0.08 percentage points from the previous month and 0.11 percentage points from the previous month.
The delinquency rate of loans to large corporations and loans to SMEs (small and medium corporations and private business loans) fell by 0.01 percentage point and 0.1 percentage point, respectively.
The household loan delinquency rate (0.2%) also fell 0.04 percentage points from the previous month and 0.06 percentage points from the previous month.
The delinquency rate for mortgage loans fell by 0.02 percentage point from the previous month, and the delinquency rate for other household loans such as credit loans fell by 0.09 percentage point.
Until now, bank delinquency rates have generally declined due to the easing of interest rate burdens due to low interest rates and high creditor-centered loans.
Since last year, the government and financial sector have provided large-scale new loans in response to the Corona 19 crisis, and have provided support for existing loans to extend maturity and postpone interest repayment.
The delinquency rate seems to have fallen despite the recession as the size of loans, the denominator of the delinquency rate, increased and the size of delinquent bonds, the numerator, decreased.
In the financial sector, it is pointed out that the delinquency rate is an indicator of the economic slowdown, and as there is a possibility that a large number of insolvency will surface at the end of policy financial support, it is important to be vigilant.
An official from the Financial Supervisory Service said, “I will continue to monitor whether the delinquency rate will rise in the future.”
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