Bank loan default rate hits 3-year high in Feb.

SEOUL, March 18 (Yonhap) -- South Korean banks' loan default rate rose to the highest level in more than three years in February as a severe economic slump hit smaller firms hard, the financial watchdog said Wednesday.

The delinquency ratio of loans extended by 18 local lenders averaged 1.67 percent
as of the end of February, up 0.17 percentage point from a month earlier, the
Financial Supervisory Service (FSS) said in a statement.
The figure was the highest since October 2005, when it also hit 1.67 percent, the
FSS said.
The FSS contributed the rate surge to small and mid-sized businesses struggling
to repay debts amid tightened bank lending and shrinking earnings due to an
economic downturn.
The delinquency ratio for corporate loans stood at 2.31 percent last month, up
0.26 percentage point from the end of January, with the rate for small and
mid-sized businesses rising 0.3 percentage point to 2.67 percent, according to
the FSS.
The default rate for household loans rose 0.07 percentage point to reach 0.89
percent last month, it said.