S. Korean financial firms` default rates drop in Q3

SEOUL, Nov. 18 (Yonhap) -- Delinquency ratios at South Korean credit card firms
and banks declined in the third quarter, falling for a second consecutive term as
corporate and household borrowers' ability to repay their debts improved amid an
economic recovery, the national financial watchdog said Wednesday.
The default rate at Samsung Card Co. and four other credit card firms stood at an
average of 2.6 percent as of the end-September, down 0.5 percentage point from
three months earlier, according to officials at the Financial Supervisory Service
(FSS).
The latest figure marked two straight quarters of decline since the average hit a
high of 3.6 percent at the end of March, and the lowest level since 2003, they
said.
"The reduced default rate came as credit card firms ramped up risk management and
aggressively unloaded distressed debts," an FSS official said.
Meanwhile, the loan default rate at local lenders reached an average 1.11 percent
as of the end of September, compared with 1.19 percent three months earlier,
according to the FSS. The bank delinquency ratio also decreased for the second
consecutive quarter after hitting 1.45 percent at end-March, it noted.
Improved repayment abilities also pushed down the default ratio on loans extended
by local insurers, reducing the rate to 3.6 percent as of end-September from 3.87
percent three months earlier, the watchdog said.
The South Korean economy, Asia's fourth-largest, expanded 2.9 percent in the
July-September period from the previous quarter as exports gathered ground and
local consumption also grew.
The third-quarter gross domestic product growth marked the third straight
quarterly advance and the fastest expansion in over seven years.
pbr@yna.co.kr
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