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S. Korea Banks’ Bad Loan Ratio Edges Down

S. Korea Banks’ Bad Loan Ratio Edges DownS. Korea Banks’ Bad Loan Ratio Edges Down

 Bad loan ratio of South Korean banks inched down in the third quarter of this year from three months earlier on a fall in new soured loans, the financial watchdog said Friday.

 The ratio of bad loans extended by 17 banks came to 1.41% at the end of September, down 0.09 percentage point from the previous quarter, according to the Financial Supervisory Service, Yonhap reported.

 The bad loan ratio refers to the proportion of a bank’s non-performing loans (NPLs) to their total lending. A debt that has been in arrears for more than 90 days and is at risk of default is considered an NPL.

 Total soured loans reached 23.2 trillion won ($20.2 billion), which breaks down to 20.9 trillion won in corporate debts and 2.2 trillion won in household lending.

 Compared to a year earlier, their bad loan ratio also fell 0.31 percentage point, it noted.

 The on-quarter decrease is attributable to a fall in fresh bad loans which stood at 4.4 trillion won during the July-September period, compared with 5.9 trillion won in the second quarter, according to the watchdog.

 Banks’ debt write-offs amounted to 5.3 trillion won in the third quarter, 1.2 trillion less than the previous quarter, it added.

 Meanwhile, South Korea plans to sell 6.85 trillion won ($5.98 billion) in state bonds in December, the finance ministry said Thursday.

 According to the ministry, the government will sell 1.7 trillion won in three-year treasury notes, 1.8 trillion won in five-year bonds and 1.8 trillion won worth of 10-year bonds next month.

 It also plans to issue 700 billion won worth of 20-year bonds and 850 billion won in 30-year bonds.

 The ministry said it sold a little over 9.86 trillion won worth of state debt in November, more than the 7.9 trillion won planned for the month. Of the total, the government sold 317 billion won worth of so-called treasury inflation-protected securities.

 

Financialtribune.com