S.Korean small firms' delinquency ratio hits 6-month high

BY  | FROM  | 2017-07-05 14:49

The delinquency ratio of bank loans to South Korean small companies hit a six-month high in May, raising worry about economic uncertainties, financial watchdog data showed Wednesday.
The ratio of bad debts owed by small firms to banks, which are at least a month overdue, stood at 0.85 percent as of end-May, up 0.06 percentage points from a month earlier, according to the Financial Supervisory Service (FSS).
It marked the highest in six months, keeping an upward trend for the third consecutive month.
Rising bad loans to small firms, which are more vulnerable to higher borrowing costs than big corporations, boosted concerns about uncertainties of the economy.
The Bank of Korea (BOK) indicated a higher policy rate as the U.S. Federal Reserve raised its benchmark rate to a range of 1.00-1.25 percent. South Korea's policy rate was cut to an all-time low of 1.25 percent in June last year.
The delinquency ratio among big corporations inched down 0.01 percentage point over the month to 0.64 percent at the end of May.
The ratio for household loans extended by banks came in at 0.3 percent as of end-May, up 0.02 percentage points from a month earlier.
The figure for mortgage loans was unchanged at 0.21 percent, but those for credit loans gained 0.04 percentage points to 0.52 percent.

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