Seoul: South Korean banks' bad-loan ratio increased in the second quarter of the year compared to three months earlier due to a rise in soured debts, data showed Wednesday. Loans classified as substandard or below (SBL) held by local lenders amounted to 18.9 trillion won (US$13.8 billion) as of the end of June, marking an increase of 1.2 trillion won from three months earlier.
According to Yonhap News Agency, the proportion of SBLs to the total outstanding loans reached 0.63 percent at the end of June, reflecting a 0.03 percentage point rise compared to the first three months of 2026. The data further revealed that approximately 7.2 trillion won in loans were newly classified as soured in the second quarter, representing an increase of 1.7 trillion won from the previous quarter.
Local banks wrote off 6.1 trillion won worth of bad loans in the April-June period, which was also up by 1.7 trillion won from the previous quarter. The ratio of business loans classified as SBLs stood at 0.77 percent as of the end of June, showing an increase of 0.03 percentage point from three months earlier.
The ratio for household loans came in at 0.33 percent as of the end of June, which also reflected an increase of 0.01 percentage point from three months earlier, according to the financial watchdog.