The ratio of bank loans, overdue at least three months, stood at 0.45 percent of the total at the end of March, down 0.05 percentage points from three months earlier, according to the Financial Supervisory Service.
The amount of non-performing loans came to 10.8 trillion won (8.6 billion U.S. dollars) at the end of March, down 1 trillion won (800 million dollars) from three months earlier.
The government induced banks to extend debt maturity or delay repayment as microbusiness owners and the self-employed still struggled with the economic slump amid the continued pandemic.
To brace for the expected gain in the bad debt ratio, banks raised their loan loss reserves ratio to 181.6 percent at the end of March. It was up 15.7 percentage points from three months earlier.
The bad debt ratio was widely forecast to be driven up by policy rate hikes and higher commodity prices.
The country's central bank began to tighten its monetary stance since August last year, increasing its key rate by a quarter percentage point to 1.75 percent in May.
Latest comments