The Financial Supervisory Service said on the 25th that as of the end of last year, the nonperforming loan ratio of domestic banks was 0.57%, maintaining a level similar to the previous quarter-end (0.57%). However, it rose 0.03 percentage points (p) from the same period a year earlier (0.54%).
The balance of nonperforming loans was 16.6 trillion won, up 200 billion won from the previous quarter-end (16.4 trillion won). By institutional sector, corporate loans accounted for the largest share at 13.2 trillion won, followed by household loans at 3.1 trillion won and credit card receivables at 300 billion won. The balance of loan-loss provisions was 26.7 trillion won, down 400 billion won from the previous quarter-end (27.1 trillion won). Accordingly, the loan-loss provision coverage ratio fell 4.5 percentage points to 160.3% from the previous quarter-end (164.8%) and was down 26.7 percentage points from the same period a year earlier (187.0%).
Newly generated nonperforming loans in the fourth quarter of last year amounted to 5.9 trillion won, up 400 billion won from the previous quarter (5.5 trillion won). Of these, new corporate loan delinquencies were 4.4 trillion won, an increase of 500 billion won from the previous quarter (3.9 trillion won), while large corporations rose to 900 billion won, up 400 billion won from the previous quarter (500 billion won). Small and midsize corporations were 3.5 trillion won, similar to the previous quarter. New household loan delinquencies were 1.4 trillion won, maintaining a level similar to the previous quarter.
During the same period, the volume of nonperforming loan resolution was 5.7 trillion won, up 100 billion won from the previous quarter (5.6 trillion won). By method, sales (2.4 trillion won) and charge-offs (1.7 trillion won), including write-offs and sales, accounted for most, followed by recoveries through disposal of collateral (800 billion won) and normalization of loans (700 billion won).
The Financial Supervisory Service assessed that while the volume of nonperforming loans increased slightly, the nonperforming loan ratio remains at a stable level. However, as the loan-loss provision coverage ratio is trending downward, it said it plans to guide banks to secure sufficient loss-absorption capacity.