Financial Institutions Saddled with W76 Tril. in Bad Loans
A combined 76 trillion won in bad loans as of the end of September sits still on the balance sheets of 1.620 financial institutions, the Financial Supervisory Service (FSS) said yesterday.
The figure is tantamount to 12.3 percent of the 619.7 trillion won financial institutions have extended.
``Bad loans still constitute a 12 percent of their total lending, a far cry from the international standard,'' said Chung Yong-wha, deputy head of the FSS.
``Financial institutions are desperate to reduce their bad loans through issuance of asset-backed securities. However, more efforts should be made in order to improve their financial soundness,'' he added.
Broken down by sector, banking is saddled with 51 trillion won in bad loans, followed by the non-banking sector including merchant banks and leasing companies with 16 trillion won, insurance firms with 4.4 trillion won and securities firm with 4 trillion won.
However, net loans classed as ``substandard'' amount to 38.8 trillion won since they already wrote off or set aside reserves against bad loans of 37. …