In February, the won-denominated loan delinquency rate at domestic banks rose, led by small and medium-sized corporations, reaching the highest level in nine months.

Looking at the Financial Supervisory Service announcement on the 17th titled ‘Status of Won-Denominated Loan Delinquency Rates at Domestic Banks as of end-February 2026’ (provisional), the share of principal and interest overdue by one month or more was 0.62%, up 0.06 percentage points from the previous month (0.56%). This was the highest since May last year (0.64%) and, on a same-month basis, the highest in ten years since 2016 (0.70%).

However, the Financial Supervisory Service explained that banks management of delinquent claims is mainly concentrated at quarter-end, so delinquency rates tend to rise during a quarter and fall at the end of the quarter.

In February, new delinquent loans totaled 3 trillion won, an increase of 200 billion won from the previous month, but with the resolution of existing delinquent loans proceeding at the same scale as the previous month (1.3 trillion won), the delinquency rate appears to have risen.

By segment, the corporate loan delinquency rate was 0.76%, up 0.09 percentage points from a month earlier. The increase was particularly large among small corporations and similar entities. The delinquency rates for small corporations and for small and medium-sized enterprise loans were 1.02% and 0.82%, respectively, rising by 0.13 percentage points and 0.10 percentage points from the previous month. The delinquency rate for large corporate loans was 0.19%, up 0.06 percentage points over the same period.

The household loan delinquency rate was 0.45%, up 0.03 percentage points from the previous month. The delinquency rate for household loans excluding mortgages, including credit loans, was 0.90%, up 0.06 percentage points over the same period. The mortgage loan delinquency rate was 0.45%, up 0.03 percentage points.

An official at the Financial Supervisory Service said, “Delinquency rates are trending upward, centered on small corporations and the like,” adding, “We will prepare for the possibility that the rising trend in delinquency rates will continue due to internal and external risk factors.” He added, “We will guide banks to strengthen asset soundness by adequately building loan-loss provisions and by resolving delinquent claims through sales and other measures.”