Bank Loan Delinquency Rate Becomes a Hidden Risk for Domestic Economy... Financial Authorities "Closely Monitoring"

The delinquency rates of major domestic banks have slightly increased. Loans to households and businesses are both showing growth trends, and financial authorities are closely monitoring the situation.

As of the end of January 2026, the delinquency rate on Korean won loans at domestic banks was 0.56%, up 0.06 percentage points from the previous month. This rebound follows a decrease to 0.60% in November 2025, caused by an increase in new overdue amounts but a significant reduction in the scale of overdue debt resolution. Notably, new overdue debt increased compared to the previous month, while the scale of overdue debt resolution shrank sharply after January, impacting the overall rate.

By sector, both household and business loan delinquency rates have risen. The household loan delinquency rate increased to 0.42%, with mortgage loans rising to 0.29%. The delinquency rate for non-mortgage household loans (including credit loans) rose to 0.84%, drawing attention from policy authorities. On the other hand, for business loans, both small and medium-sized enterprises and large corporations saw increases in delinquency rates.

The Financial Supervisory Service stated that, considering domestic and international economic uncertainties, it will continue to monitor the soundness of bank assets. In particular, it plans to focus on vulnerable industries, handle non-performing loans, strengthen loss absorption capacity, and guide banks to actively manage their financial health.

Looking ahead, the economic situation is likely to be influenced by external factors such as instability in the Middle East. There are concerns that this rising trend in loan delinquencies could persist or worsen over the long term. The measures taken by financial authorities are closely watched.