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S. Korean banks' bad loan ratio falls in Q3
Writer : Sender
Nov 10, 2009
South Korean banks' bad loan ratio fell in the third quarter from three months earlier thanks to their efforts to dispose of problem loans, the national financial watchdog said Tuesday.
The ratio of 18 local lenders' nonperforming loans to total lending reached 1.48 percent as of the end of September, down 0.03 percentage point from three months earlier, according to the Financial Supervisory Service. It marked the first decline in five quarters, it added.
As of end-September, their problem loans totaled 19.2 trillion won (US$16.5 billion), down 400 billion won from the previous quarter.
"The bad loan ratio declined as the amount of fresh bad debts fell and local banks aggressively wrote off or sold such problem loans last quarter," the watchdog said in a statement.
In the July-September period, local banks cleared 6.2 trillion won in bad loans, down from 7.3 trillion won the preceding quarter, it added. But the disposal of the problem loans compared with 2.5 trillion won during the same period last year.
The bad debt ratio for loans to smaller firms stood at 2.38 percent as of the end of the third quarter, down 0.11 percentage point from three months earlier. Hit by the economic slowdown, the ratio jumped as much as 0.59 percentage point in the fourth quarter of 2008, but the growth has eased as the economy shows signs of improving.
The country's financial watchdog advised local banks to continue to lower their bad loan ratio to around 1 percent by the end of this year.
A private debt clearer was launched on Oct. 1, led by six local banks including top lender Kookmin Bank, to buy around five trillion won in bad assets.
(Source: Yonhap News)
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