Corporate Loan Delinquency Rates in South Korea Hit 10-Year Highs in H1 2026

According to South Korea's Financial Supervisory Service (FSS), corporate loan delinquency rates surged to 0.84% as of May 2026, the highest level in nearly a decade, even as major banks shifted lending focus toward corporate clients due to tightened household credit regulations.

Delinquency rates among small and medium-sized enterprises (SMEs) reached 1.00%, marking an 11-year high since May 2015. The Bank of Korea warned that credit risks for both businesses and households would rise further in Q3 2026, citing prolonged economic weakness and elevated borrowing costs. Meanwhile, the four major financial conglomerates' non-performing loans (NPL) totaled 14.2 trillion Korean won as of end-Q2, up 19.3% from year-end 2025.