Regional banks see delinquency rates rise as economic polarization deepens

Commercial banks that serve customers primarily in provincial areas are facing rising delinquency rates, as more borrowers fall behind on past due loan payments amid deepening economic divides. The challenging business environment for these regional lenders is in stark contrast with larger banks based in the Seoul metropolitan area, as well as fast-growing internet-only banks. Data compiled by four major regional lenders — Busan Bank, Kyongnam Bank, Jeonbuk Bank and Kwangju Bank — reported an average delinquency rate of 1.07 percent for the first half of the year. The rate rose from 0.61 percent from a year earlier, exceeding the 0.34 percent average recorded by the country’s four largest commercial banks operating nationwide — KB Kookmin, Shinhan, Hana and Woori. The 1 percent rate is widely considered the psychological red line for banking stability, industry officials said Wednesday. They said the breach reflects growing pressure on regional economies, where small and medium-sized enterprises (SMEs) and self-employed borrowers, the backbone of local lending, are increasingly stWeiter zum vollständigen Artikel bei Korea Times Weiter zum vollständigen Artikel bei Korea Times