Banks struggling to shed bad SME loans


South Korea’s major commercial banks are suffering from overdue loans to households and small- and medium-sized enterprises (SMEs).

Of banks, Woori Bank posted the biggest increase in non-performing loans (NPLs) in January. NPLs in households soared 0.4 percentage point from a year earlier to 2.3 per cent, with those in SMEs rising 0.15 percentage point to 3.3 per cent.

A spokesman for Woori said “he increase came as it has failed to sell NPLs owned by households and SMEs or settle them with a loan loss provision.”

The major concern for the banks is that the principle money is slow to be returned due to economic uncertainty.

Source: The Korea Times



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