Corporate loan delinquency rate jumps from 0.80% to 1.21% in a single quarter
SME delinquency rate reaches 1.46%; bad-loan ratio climbs to 1.69%
Household loan delinquency rate edges down to 0.83%
The bad-loan ratio on insurers' corporate lending rose to 1.62 percent at the end of the second quarter this year, the highest level in a decade. The corporate loan delinquency rate also climbed 0.41 percentage points in a single quarter, with delinquency and bad-loan ratios rising particularly sharply in the small and medium-sized enterprise segment.
According to the Financial Supervisory Service on the 28th, the outstanding balance of insurer loan receivables stood at 266 trillion won ($192 billion) at the end of June, up 1.9 trillion won, or 0.7 percent, from the previous quarter. Household loans totaled 136.1 trillion won, an increase of 1.6 trillion won, while corporate loans reached 129.8 trillion won, up 300 billion won.
Asset quality deteriorated more sharply on the corporate side. The overall loan delinquency rate rose 0.26 percentage points to 1.08 percent from the previous quarter. The corporate loan delinquency rate climbed from 0.80 percent to 1.21 percent, a gain of 0.41 percentage points, while the household loan delinquency rate edged down 0.04 percentage points, from 0.87 percent to 0.83 percent.
Among corporate loans, the delinquency rate for small and medium-sized enterprises surged 0.66 percentage points, from 0.80 percent to 1.46 percent. The delinquency rate for large corporations fell over the same period, from 0.81 percent to 0.71 percent.
![A corporate loan consultation screen displayed on a bank kiosk in Seoul. [Yonhap]](https://wimg.heraldcorp.com/news/cms/2026/08/28/rcv.YNA.20260722.PYH2026072208060001300_P1.jpg)
Bad-loan ratios also worsened, led by corporate lending. The overall bad-loan ratio rose 0.18 percentage points to 1.31 percent from 1.13 percent, while the corporate bad-loan ratio climbed 0.27 percentage points to 1.62 percent from 1.35 percent — the highest level in a decade. The bad-loan ratio for small and medium-sized enterprise loans rose from 1.36 percent to 1.69 percent. The household bad-loan ratio edged down slightly, from 0.68 percent to 0.67 percent.
Within household lending, policy loans against insurance contracts grew 1.4 trillion won to 72.8 trillion won from 71.4 trillion won. Mortgage loans held steady at 51.7 trillion won, unchanged from the previous quarter. Among corporate loans, the outstanding balance of small and medium-sized enterprise lending stood at 86.9 trillion won, roughly flat from the prior quarter.
The Financial Supervisory Service attributed the rise in delinquency and bad-loan ratios to greater economic volatility and a delayed recovery in recent months. The regulator plans to guide insurers to bolster their loss-absorption capacity and strengthen asset quality management in response to the rising delinquency rates.
Meanwhile, the delinquency rate on small and medium-sized enterprise loans at non-bank lenders — including savings banks, insurers and mutual finance institutions — stood at 7.19 percent at the end of the first quarter this year, more than four times the 1.65 percent recorded in 2021. Non-performing corporate loans at the five major banks also rose 36.4 percent from the end of last year to 4.65 trillion won at the end of June.
rim@heraldcorp.com
