Bank loan defaults fall in Sept.

SEOUL, Oct. 11 (Yonhap) -- The loan delinquency rate for South Korean banks fell
in September as improving corporate funding conditions helped reduce the amount
of fresh overdue debts, the financial watchdog said Sunday.

The overall delinquency rate of bank loans to companies and households came in at
1.11 percent as of the end of September, down 0.26 percentage point from a month
earlier, according to the Financial Supervisory Service (FSS).
The rate rose for the second straight month in August after declining to a
six-month low in June, when banks usually clean up bad loans to burnish their
financial profiles, it added.
"Last month, the amount of new overdue loans declined and banks wrote off more
bad debts to make their balance sheets clean at the end of the third quarter,"
the FSS said.
The growth in the delinquency rate had slowed since March, snapping an upward
trend that began in September last year, when the collapse of Lehman Brothers
Holdings Inc. 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 1.72 percent as of the
end of last month, down 0.46 percentage point the previous month, the watchdog
said. The corresponding rate of home-backed lending came to 0.41 percent, down
from 0.46 percent a month earlier.
sooyeon@yna.co.kr
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