Bank loan defaults fall in June

SEOUL, July 20 (Yonhap) -- The delinquency rate at South Korean banks fell
sharply in June from a month earlier as improving corporate funding conditions
helped reduce the amount of fresh overdue debts, the nation's financial watchdog
said Monday.
The overall delinquency rate of bank loans to companies and households came in at
1.19 percent as of the end of June, down 0.41 percentage point from a month
earlier, according to the Financial Supervisory Service. The rate gained 0.4
percentage point from the previous year, it added.
The growth in the delinquency rate has slowed since March, snapping an upward
trend that began in September when the collapse of Lehman Brothers Holdings Inc.
battered global financial markets. The rate reached up to 1.67 percent at the end
of February.
The default rate of bank loans to smaller firms reached 1.86 percent at the end
of last month, sharply down from 2.57 percent the previous month and below the
2-percent level for the first time this year, the watchdog said. The
corresponding rate of home-backed lending came to 0.43 percent, compared with
0.55 percent from a month earlier.
The South Korean economy averted a technical recession in the first quarter by
growing 0.1 percent on-quarter in the January-March period. The Bank of Korea
said last week that Asia' fourth-largest economy is estimated to have expanded
2.3 percent in the second quarter from three months earlier.
sooyeon@yna.co.kr
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