South Korean banks' loan default rate declined in June, curbing two months of upturn, as lenders beefed up the clearance of soured loans, the financial regulator said Wednesday.
The Financial Supervisory Service (FSS) said that the average loan delinquency rate at 18 local banks stood at 0.99 percent of their total lending as of the end of last month, down from 1.22 percent a month earlier.
The figure marks the lowest level since December of last year when it posted 0.74 percent and the first decline in three months, according to the FSS.
The default rate covers bank lending whose principal repayment is overdue one day or longer.
The decline came as banks increased their efforts to sell or write off unprofitable loans before closing their books in June, the regulator said, adding the banks cleared a total of 4.7 trillion won (US$4 billion) of overdue loans last month.
The default rate on corporate loans fell to 1.34 percent on-month from 1.71 percent with that on household lending, mostly mortgage loans, also falling from 0.62 percent to 0.57 percent, it said.
(Source: Yonhap News)
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