S. Korean banks' loan defaults climb in Aug.

SEOUL, Oct. 6 (Yonhap) -- The delinquency rate for loans extended by South Korean
banks climbed for a second month in August mainly driven by a seasonal factor,
the nation's financial watchdog said Tuesday.
The overall default ratio of bank loans to companies and households stood at 1.37
percent as of the end of August, up 0.05 percentage point from the previous
month, according to the Financial Supervisory Service (FSS).
The financial regulator said the August gain is attributable to the tendency of
banks to write off more bad debts in the final month of each quarter. The FSS
expects the ratio to fall again in September, it said.
The loan default rate has been on the decline since March, putting the brakes on
an upward trend that began in September last year as the collapse of Lehman
Brothers Holdings Inc. pummeled the global financial market. The rate shot up to
1.67 percent at the end of February.
The default rate of bank loans to corporate borrowers reached 1.94 percent at the
end of August while the corresponding figure for household lending stood at 0.67
percent, it said.
pbr@yna.co.kr
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