SEOUL, July 30 (Yonhap) -- The delinquency rate for loans extended by South Korean banks fell to the lowest in 18 months in June, as banks saw a decrease in fresh bad loans and opted to write off overdue debts, the financial regulator said Tuesday.
The loan delinquency rate of 18 local banks stood at 0.98 percent last month, down 0.3 percentage point from the previous month, according to the Financial Supervisory Service (FSS).
The June figure marks the lowest since the 0.89 percent tallied in December 2011, the FSS said. It is also lower than the 1.09 percent delinquency rate a year earlier, it said.
The sharp decline in overdue loan rate came as banks wrote off more debts in arrears ahead of their half-year earnings releases and as fresh soured loans declined, the regulator said.
The delinquency rate for corporate loans stood at 1.09 percent in June, down 0.39 percentage point from 1.48 percent a month earlier.
The local banks cleared a total of 5.4 trillion won worth of bad loans last month, more than two-fold from the 2.2 trillion won worth of write-offs in May.
The amount of banks' fresh bad loans reached 2.1 trillion won (US$1.89 billion) in June, also down from 2.6 trillion won the previous month.
The delinquency rate of household loans slipped 0.18 percentage point on-month to 0.86 percent in June, largely due to a drop in bad loan rates of mortgages and credit loans.
The regulator said it will continue to keep close tabs on the overdue rate of risky industries such as shipbuilding and property sectors as global uncertainties remain to weigh them down.