South Korea’s five major banks saw long-term delinquent loans rise to about $716.7 million in 2026, while loans overdue for one month to less than one year remained elevated at about $3.84 billion. Data from Korea Federation of Banks and Korea Federation of Bank Research. Graphic by Asia Today and translated by UPI
June 3 (Asia Today) -- South Korea's major commercial banks are facing growing pressure from a sharp rise in long-overdue loans, with the amount of loans unpaid for more than one year exceeding 1 trillion won, or about $716 million, in the first quarter.
Loans overdue for less than one year, which could later worsen into long-term delinquencies, also approached 6 trillion won, or about $3.84 billion. The increase suggests that borrower distress is deepening, especially among corporate borrowers, despite banks' efforts to dispose of nonperforming loans.
The sequential expiration of COVID-19 loan maturity extensions also appears to be adding pressure on delinquent borrowers.
Banks, which have continued to post strong earnings, are concerned that rising long-term delinquencies could increase loan-loss provision burdens. The longer a loan remains overdue and the lower its chance of recovery becomes, the more banks must set aside in provisions.
