00:03Three savings banks in Korea now report property loan delinquency above 30%.
00:09One of them is above 35.
00:12The industry-wide delinquency rate has been falling.
00:15These institutions are moving the other way.
00:18Regional and non-residential projects are where the damage is concentrated,
00:23and capital buffers have started to thin.
00:25It's Wednesday, September 2nd.
00:27Let's break down what's happening in Korea's financial sector.
00:31Lenders have been clearing distressed project financing sites for two years.
00:36The viable ones went first.
00:38What is left is heavily weighted toward regional and non-residential developments,
00:42and rising rates have made those harder to refinance.
00:46Here's what the numbers show.
00:48Three savings banks posted property-related loan delinquency above 30% as of the end of June.
00:54KB, Sang Sangin, and Diem Young.
00:56KB Savings Bank held 212.5 billion won in property-related loans with 74.47 billion won overdue,
01:07a 35.1% delinquency rate, up from 18.3% at the end of last year.
01:13Sang Sangin Savings Bank reported 105.7 billion won overdue against 342.9 billion won in property loans,
01:23a rate of 30.83%, slightly below its 31.48% at year-end.
01:30Diem Young Savings Bank carried a smaller book, 43.2 billion won in total, with 13.0 billion won overdue.
01:38Sector-wide, property-related arrears at savings banks totaled 2.7 trillion won, roughly $1.97 billion,
01:47while 1.7 trillion won of credit sits in the caution grade under project viability assessments.
01:53The industry delinquency rate eased from 8.52% to 6.04% before ticking back up to 6.26%,
02:02and the average capital ratio slipped from 15.85% to 15.73%.
02:09So what does this mean for bank analysts and financial regulation specialists?
02:14Earlier, we said the viable projects went first.
02:18Here's what that actually means for you.
02:20A falling headline delinquency rate is now compatible with worsening credit at the tail,
02:25because the denominator is shrinking faster than the problem.
02:2940 savings banks now sit above 10% property delinquency,
02:33which makes this a dispersion story rather than a systemic one.
02:36Watch third-quarter disclosures for whether the 6.26% uptick extends.
02:43Watch the pace of disposals for the 1.7 trillion won caution-grade book.
02:48Watch capital ratios at the institutions above 30%.
02:52That's today's AI Prism, Finance Daily.
02:56This episode was produced with AI assistance based on Seoul Economic Daily reporting
03:01and reviewed by a human editor.
03:03AI Prism is a Juan IFRA award-winning series.
03:07We'll be back tomorrow.
