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S. Korean banks' bad debt ratio rises in Q4

SEOUL
2023-03-22 11:35

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SEOUL, March 22 (Xinhua) -- South Korean banks' bad debt ratio rose in the fourth quarter of last year amid higher interest rates, financial watchdog data showed Wednesday.

Bank loans, overdue at least three months, stood at 0.40 percent of the total loans at the end of December, up 0.02 percentage points from three months earlier, according to the Financial Supervisory Service (FSS).

Outstanding non-performing loans increased by 400 billion won (306 million U.S. dollars) to 10.1 trillion won (7.7 billion dollars), while the total bank loans declined by 8.7 trillion won (6.7 billion dollars) during the October-December quarter.

It came amid higher interest rates as the country's central bank began to raise its benchmark interest rate in August 2021 from a record low of 0.50 percent to 3.50 percent.

The bad debt ratio for bank corporate loans added 0.02 percentage points from three months earlier to 0.52 percent at the end of December, while the ratio for household loans rose 0.01 percentage points to 0.18 percent.

The ratio of banks' loan loss reserves to the non-performing loans came in at 227.2 percent at the end of December, up 3.3 percentage points from three months earlier.
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