The South Korea Financial Supervisory Service published supervisory statistics on domestic banks’ loans classified as substandard or below (SBLs), showing the SBL ratio at 0.57% at end-September 2025. This was 0.02 percentage points lower than three months earlier but 0.04 percentage points higher than a year earlier, with SBLs at KRW 16.4 trillion on total loans of KRW 2,874.4 trillion. SBLs were concentrated in business lending (KRW 13.1 trillion), with household loans at KRW 3.0 trillion and credit card receivables and loans at KRW 0.3 trillion. Total provisions for bad debts fell to KRW 27.1 trillion from KRW 27.4 trillion at end-June, while the provisions coverage ratio declined to 164.8% (down 0.7 percentage points quarter-on-quarter and down 22.6 percentage points year-on-year). By segment, business-loan SBLs were 0.71% (large companies 0.41%, SMEs 0.88%), household-loan SBLs were 0.30% (mortgages 0.20%, unsecured loans 0.62%), and credit card SBLs were 1.87%. New SBLs in the third quarter of 2025 were KRW 5.5 trillion and resolved SBLs were KRW 5.6 trillion, including KRW 3.4 trillion in write-offs and loan sales.
South Korea Financial Supervisory Service 2025-11-27
South Korea Financial Supervisory Service reports domestic banks’ substandard-or-below loan ratio edges down to 0.57% in September 2025
The South Korea Financial Supervisory Service reported that the substandard or below (SBL) loan ratio for domestic banks was 0.57% at the end of September 2025, slightly lower than three months prior but higher than a year earlier. SBLs totaled KRW 16.4 trillion, with business lending accounting for KRW 13.1 trillion. Provisions for bad debts decreased to KRW 27.1 trillion, and the provisions coverage ratio fell to 164.8%.