April 29, 2024

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(Yonhap News)

Rises in high interest rates led to a 49 percent surge in Korean banks' potential uncollected loans for 2023, Yonhap News reported, citing a data from the financial industry.

The data released on Tuesday revealed a significant 49 percent increase in the potential uncollected loans held by four major financial holding firms in 2023, largely influenced by elevated interest rates impacting borrowers.

In 2023, the total value of potential uncollected loans amounted to 1.96 trillion won ($1.47 billion), marking a substantial surge of 48.8 percent compared to the previous year, as reported by the financial holding firms.

These financial institutions include KB Financial, Shinhan Financial, Hana Financial, and Woori Financial.

The spike in potential uncollected loans is primarily linked to the combination of high interest rates and a slower-than-anticipated economic recovery.

Data from the Bank of Korea reveals that the average lending rate of banks in South Korea increased to 5.19 percent in the past year, rising from 4.29 percent in 2023 and 2.88 percent in the preceding year.

By Investor News (investor@heraldcorp.com)