In March, the amount of arrears for domestic banks increased by 3 trillion won. As banks organized 4 trillion won worth of arrears, the arrears rate slightly decreased.
According to the Financial Supervisory Service on the 21st, as of the end of March, the arrears rate for domestic banks' won loans (based on more than 1 month of principal and interest arrears) was 0.53%, down 0.05 percentage points from the end of the previous month. Compared to the same period last year, the figure rose by 0.10 percentage points.
In March, the new arrears amount totaled 3 trillion won, which was an increase of 1 trillion won compared to the previous month (2.9 trillion won). The amount of arrears organized by banks recorded 4.1 trillion won, an increase of 2.3 trillion won from the previous month. Even though the new arrears amount increased, the arrears rate decreased as the amount of organized arrears grew.
A FSS official noted, "Typically, at the end of the quarter, there is a tendency for the arrears rate to drop significantly due to the expansion of organized arrears."
By institutional sector, the arrears rate for corporations was 0.62%, a decrease of 0.06 percentage points compared to the previous month. During this period, the arrears rate for large corporations was 0.11%, rising by 0.01 percentage points, while the arrears rate for small and medium-sized enterprises was 0.76%, down by 0.08 percentage points. The arrears rate for individual business loans was recorded at 0.71%.
The arrears rate for household loans showed a decrease of 0.02 percentage points compared to the previous month, standing at 0.41%. The arrears rate for dwelling mortgage loans was 0.29%, and the arrears rate for household loans such as credit loans was recorded at 0.79%.
A FSS official noted, "It is necessary to prepare for the potential sustained rise in the arrears rate due to increased domestic and international uncertainties," and added, "We will strengthen asset soundness management, including proactive organization of arrears and expansion of provisions for bad debts."