Korean banks see bad loans rise in Q2

Korean banks' bad loan ratio rose in the second quarter from three months earlier, driven by a rise in soured debts, data showed Wednesday.

Loans classified as substandard or below (SBL) held by local lenders totaled 18.9 trillion won ($13.8 billion) as of the end of June, up 1.2 trillion won from three months earlier, according to data from the Financial Supervisory Service.

The proportion of SBLs to total outstanding loans totaled 0.63 percent at the end of June, up 0.03 percentage point vis-a-vis the first three months of 2026.

Some 7.2 trillion won in loans were newly classified as soured in the second quarter, up 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, also up 1.7 trillion won from the previous quarter, according to the data.

The ratio of business loans classified as SBLs stood at 0.77 percent as of the end of June, up 0.03 percentage point from three months earlier.

The ratio of household loans totaled 0.33 percent as of the end of June, also up 0.01 percentage point from three months earlier, according to the financial watchdog.

Yonhap