S.Koreas bad debts stay high in 2014 on corporate loans

Bad debts among South Korean banks slightly fell last year, but it stayed high on sour corporate loans, financial watchdog data showed Wednesday.

Debts overdue more than three months among domestic banks stood at 23.8 trillion won (21.7 billion U.S. dollars) as of the end of last December, according to Financial Supervisory Service (FSS).

The figure was down some 2 trillion won from a year earlier, but it was relatively large compared with 18.8 trillion won in 2011 and 18.5 trillion won in 2012.

Sour corporate loans reached 21.1 trillion won, accounting for nearly 90 percent of the total. Bad household debts were 2.6 trillion won, with credit card debts amounting to 0.1 trillion won.

New delinquent loans in 2014 came to 23 trillion won, among which fresh bad debts from companies accounted for more than 80 percent.

The ratio of bad debts to total bank loans was 1.53 percent at the end of December, down 0.26 percentage points from a year earlier.

The bad debt ratio in corporate loans declined 0.34 percentage points from a year earlier to 2.05 percent in 2014, but it was higher than 1.66 percent tallied in 2012.

The high rate of sour corporate loans came from shipbuilding and construction industries, whose bad debt ratios reached 5.77 percent and 5.72 percent each as of end-December.

Resolved bad debts in 2014 amounted to 25 trillion won. Debt resolutions included 8 trillion won in write-off, 6.3 trillion won in recovery via collateral sales, 5 trillion won in debt transfer and 4.1 trillion won in normalized loans. Endi