Banks, rapid increase in loans that do not even receive interest… Corporate loans become more serious | Seoul Media Foundation TBS

According to the quarterly report for the third quarter of this year published by the four largest domestic banks (KB Kookmin, Shinhan, Hana, and Woori Bank) on the 20th, the balance of ‘non-performing loans’, which are loans that do not even receive interest, let alone principal, at these banks was 2 as of the end of the third quarter of this year. It reached KRW 898.8 billion, a sharp increase of 27.3% compared to the end of last year.

This is a notable increase compared to the 3.0% increase in total loans from the four major banks over the same period.

Accordingly, the ratio of non-performing loans to total loans increased from 0.18% to 0.22%.

Non-performing loans were found to be particularly severe for corporate loans than for households.

At the end of the third quarter of this year, non-performing loans in the corporate loan sector of the four major banks increased by 29.0% to KRW 1.9754 trillion, and some banks increased by nearly 50%.

During the same period, non-profitable loans in the household loan sector increased by 23.7% to KRW 923.4 billion.

Due to high interest rates, rising raw material prices, and a decline in consumption, ‘tin can loans’ are being issued one after another by companies that have gone through final bankruptcy or entered bankruptcy/liquidation procedures.

The number of corporate bankruptcy cases filed by courts nationwide reached 1,213 in the third quarter of this year, a 64.4% increase over the same period last year.

Also, according to the Bank of Korea, the cumulative national banknote defaults at the end of the third quarter of this year increased by 214.9% to 4.1569 trillion won.

An official from a commercial bank said, “The current amount of non-performing loans is at a manageable level,” but added, “Considering loan maturity and repayment pressure, the first half of next year will be a critical period for companies.”