Korea Business News Agency - NSP NEWS AGENCY.

(Seoul=NSP NEWS AGENCY) = In the first half of this year, the delinquency rate of the four major commercial banks(KB, Shinhan, Hana, and Woori) increased, and the successive hikes in home loan rates and expansion of corporate lending triggered an emergency in prudential management.

Banks are expecting that the possibility of a cut in the base interest rate in the second half of this year will increase, and that prudential indicators such as the delinquency rate will improve.

The average delinquency rate of the four major commercial banks in the first half of this year was 0.28 percent, up 0.04 percentage points from the first half of last year(0.24 percent), according to the Financial Services Commission on Monday.

By bank, the largest increase in delinquency rate was seen at KB Kookmin Bank. In the first half of this year, KB’s delinquency rate was 0.28%, up 0.09 percentage points from last year. Woori Bank has the highest delinquency rate. Woori Bank’s delinquency rate rose from 0.26% last year to 0.30% in the first half of this year. Shinhan Bank and Hana Bank both increased by 0.01 percentage points from 0.26% to 0.27%.

The expansion of corporate lending had a major impact on the deterioration of soundness.

As of the second quarter of this year, the balance of corporate loans from the four major commercial banks was approximately KRW 714.692 trillion, an increase of KRW 46.489 trillion (approximately 7%) compared to the end of last year.

Regarding this, a commercial bank official said, “Currently, interest rates are high, and the base rate has not yet fallen, which has led to deterioration in soundness, including the delinquency rate,” adding, “The possibility of an interest rate cut in the second half of the year has been mentioned, so if interest rates fall, the delinquency rate is expected to stabilize.”

By Soon-ki Lee(s8789@nspna.com) and Soo-in Kang(sink606@nspna.com)

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