South Korea’s Financial Supervisory Service published preliminary end-June 2025 data on domestic banks’ loans classified as substandard or below (SBLs), showing the systemwide SBL ratio unchanged from end-March at 0.59% and the SBL stock flat at KRW 16.6 trillion. Over the same quarter, provisions for bad debts fell to KRW 27.4 trillion from KRW 28.4 trillion, pushing the provision coverage ratio down 5.0 percentage points to 165.5%. SBLs comprised KRW 13.1 trillion of business loans, KRW 3.2 trillion of household loans and KRW 0.3 trillion of credit card receivables and loans. By portfolio, the business-loan SBL ratio remained 0.72%, with large-company SBLs declining to 0.41% (from 0.45%) while SMEs ticked up to 0.90% (from 0.89%); household loans stayed at 0.32%, with mortgages rising to 0.23% (from 0.22%) and unsecured loans easing to 0.61% (from 0.62%). Credit card receivables and loans improved to 1.93% (from 2.01%). In flow terms, new SBLs in the second quarter of 2025 totalled KRW 6.4 trillion (KRW 4.9 trillion business, KRW 1.4 trillion household), while resolved SBLs totalled KRW 6.5 trillion, including KRW 4.2 trillion via write-offs and loan sales. All figures are preliminary and subject to change.
South Korea Financial Supervisory Service 2025-09-05
South Korea Financial Supervisory Service reports domestic banks’ substandard-or-below loan ratio steady at 0.59% at end-June 2025 as coverage ratio declines
South Korea's Financial Supervisory Service's preliminary data for end-June 2025 shows the systemwide substandard or below (SBL) loan ratio at 0.59%, with SBL stock steady at KRW 16.6 trillion. Provisions for bad debts decreased to KRW 27.4 trillion, reducing the provision coverage ratio by 5.0 percentage points to 165.5%. Business loans accounted for KRW 13.1 trillion of SBLs, while household loans and credit card receivables comprised KRW 3.2 trillion and KRW 0.3 trillion, respectively.