(LEAD) Bank loan delinquency rate hits 2-year low in Dec.

(ATTN: RECASTS headline, lead, para 3)
SEOUL, Jan. 21 (Yonhap) -- The delinquency rate for South Korean bank loans fell
to the lowest level in two years in December as lenders disposed of more overdue
debts to bolster their balance sheets, the financial watchdog said Thursday.

The overall delinquency rate of bank loans to companies and households came in at
0.76 percent as of the end of December, down 0.34 percentage point from a month
earlier, according to the Financial Supervisory Service (FSS).
The December figure was the lowest level since December 2007 when the rate stood
at 0.74 percent. It also marked the first time that the rate stayed below 1
percent since August 2008, it added.
The FSS said the fall in the rate came as banks made aggressive efforts to sell
or write down a large amount of bad debts before closing their books.
The growth in the delinquency rate had slowed since March, snapping an upward
trend that began in September 2008, when the collapse of Lehman Brothers battered
global financial markets. The rate shot up to 1.67 percent at the end of
February.
The default rate of bank loans to smaller firms reached 1.14 percent as of the
end of last year, down 0.58 percentage point the previous month, the watchdog
said. The corresponding rate of home-backed lending came to 0.33 percent, down
from 0.4 percent a month earlier.
sooyeon@yna.co.kr
(END)

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