Seoul: Financial institutions' exposure to real estate development declined by more than 12 percent last year as they struggled to write off or reduce loans extended to risky projects, data showed Wednesday.
According to Yonhap News Agency, the data from the Financial Supervisory Service revealed that banks, insurers, and other financial institutions held 202.3 trillion won (US$139 billion) worth of real estate project financing (PF) loans as of December, marking a 12.5 percent decrease, or 28.8 trillion won, from a year earlier.
Of the total, risky real estate PF loans were tallied at 19.2 trillion won at the end of last year, making up approximately 9.5 percent of the total. The financial institutions had allocated 10.6 trillion won in reserves against potentially soured PF loans as of end-December, which was a reduction of 0.7 trillion won from the previous year.
The delinquency ratio of real estate PF loans stood at 10.33 percent at the end of December, down 0.92 percentage point over the cited period.