South Korean banks’ bad loans climb 0.47% in December

This reflects a significant increase compared to the previous year.

South Korea’s domestic banks saw an increase of 0.47% in the ratio of bad loans to the total outstanding loans by the end of December 2023, according to a report released by the Financial Supervisory Service (FSS).

This shows a 0.03% growth three months prior and a rise of 0.40% from December 2022.

The amount of bad loans by the end of December reached approximately $9.41b (KRW12.5t), an increase from $8.68b (KRW11.5t) as of the end of September.

Bad loans from businesses in December totalled $7.54b (KRW10t), whereas household and credit card loans reached approximately $1.73b (KRW2.3t) and $151m (KRW200b) respectively.

The provision coverage ratio decreased by 3% despite banks’ attempts to add more provisions for bad debts.