S. Korean banks` bad loan ratio falls in Q3

(ATTN: ADDS more details in paras 2,6,8)
SEOUL, Nov. 10 (Yonhap) -- South Korean banks' bad loan ratio fell in the third
quarter from three months earlier thanks to their efforts to dispose of problem
loans, the national financial watchdog said Tuesday.
The ratio of 18 local lenders' nonperforming loans to total lending reached 1.48
percent as of the end of September, down 0.03 percentage point from three months
earlier, according to the Financial Supervisory Service. It marked the first
decline in five quarters, it added.
As of end-September, their problem loans totaled 19.2 trillion won (US$16.5
billion), down 400 billion won from the previous quarter.
"The bad loan ratio declined as the amount of fresh bad debts fell and local
banks aggressively wrote off or sold such problem loans last quarter," the
watchdog said in a statement.
In the July-September period, local banks cleared 6.2 trillion won in bad loans,
down from 7.3 trillion won the preceding quarter, it added. But the disposal of
the problem loans compared with 2.5 trillion won during the same period last
year.
The bad debt ratio for loans to smaller firms stood at 2.38 percent as of the end
of the third quarter, down 0.11 percentage point from three months earlier. Hit
by the economic slowdown, the ratio jumped as much as 0.59 percentage point in
the fourth quarter of 2008, but the growth has eased as the economy shows signs
of improving.
The country's financial watchdog advised local banks to continue to lower their
bad loan ratio to around 1 percent by the end of this year.
A private debt clearer was launched on Oct. 1, led by six local banks including
top lender Kookmin Bank, to buy around five trillion won in bad assets.
sooyeon@yna.co.kr
(END)