S. Korean insurers' loan delinquency rate hits 6-month low

SEOUL, July 28 (Yonhap) -- The loan delinquency ratio of South Korean insurers
declined to a six-month low in June as they wrote off some bad debts and the
amount of new overdue loans fell, the financial watchdog said Tuesday.
The average default ratio of loans extended by local life and non-life insurers
reached 3.81 percent as of the end of June, down from 4.09 percent the previous
month, according to the Financial Supervisory Service. The June figure marked the
lowest level since the 3.76 percent recorded in December 2008.
The delinquency ratio had been on the rise since September as more companies held
overdue debts amid the slowing economy. But the overall default rate has declined
since May as insurers have written off problem loans and the amount of new
delinquent loans dropped.
The total amount of insurer loans reached an outstanding 79.1 trillion won
(US$63.6 billion) as of end-June.
The delinquency ratio for household loans extended by insurers came in at 3.25
percent as of end-June, down from 3.46 percent from a month earlier. That of
corporate loans declined 0.46 percentage point on-month to 5.28 percent, the
watchdog said.
Amid signs of improving economic activity, the bank loan delinquency rate also
declined to a six-month low in June.
The South Korean economy grew 2.3 percent in the second quarter from three months
earlier, the fastest growth in more than five years, as fiscal spending helped
bolster consumer spending and exports picked up.
Asia's fourth-largest economy averted a technical recession in the first quarter
by growing 0.1 percent from the final quarter of 2008, when it tumbled 5.1
percent.
sooyeon@yna.co.kr
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