Bank loan defaults hit 6-month low in June

(ATTN: RECASTS headline, first 3 paras)
SEOUL, July 20 (Yonhap) -- The delinquency rate at South Korean banks fell to a
six-month low in June as improving corporate funding conditions helped reduce the
amount of fresh overdue debts, the 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 and marking a yearly low, according to the Financial Supervisory Service.
The rate, however, gained 0.4 percentage point from a year earlier, it added.
The June figure marked the lowest level since December 2008 when the rate stood
at 1.08 percent, the watchdog said.
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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