HomeArticlesServicePriceAbout

According to the Financial Supervisory Service (FSS), non-performing loans (NPLs) at domestic banks reached KRW 14.8 trillion as of December 2024, the highest level since March 2020 (KRW 15 trillion). While the NPL ratio remained flat quarter-over-quarter at 0.53%, it increased by 6bps YoY. Notably, the household loan NPL ratio rose from 0.27% to 0.29%, signaling growing stress in consumer credit.

Following post-COVID credit support measures, the overall NPL ratio had stabilized, but began climbing again from Q3 2022. Although the pace of deterioration has recently moderated, the uptick in household loan delinquencies warrants closer investor scrutiny. Meanwhile, corporate loan NPLs held steady at 0.65%.

To brace for prolonged economic weakness and policy uncertainty, banks have expanded their loan-loss provisions to KRW 27.8 trillion, with their reserve coverage ratio inching up 0.3pp to 187.7% from the previous quarter. The FSS noted it will continue strengthening asset quality oversight across the banking sector.

[Compliance Note]

• All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.

• The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.

• Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.