Changwon’s spring about more than cherry blossoms

S. Korean banks' foreign-currency loans dip in 2013

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Published : 2014-03-02 14:27
Updated : 2014-03-02 14:27

Foreign-currency loans extended by South Korean banks declined last year from a year earlier, as a stronger won helped borrowers repay their outstanding debts, mostly yen-denominated ones, the financial watchdog said Sunday.

The amount of foreign currency-denominated loans extended by local banks reached $25.17 billion at the end of last year, down $4.77 billion from a year ago, according to the Financial Supervisory Service.

The decline was attributable to the Korean won's ascent to the Japanese currency, which prodded borrowers to repay yen-denominated loans or refinance them with won-denominated ones.

The won-yen rate soared 24.2 percent last year, according to the watchdog.

Dollar-denominated loans extended by local banks stood at $17.34 billion at the end of last year, up from $16.69 billion a year ago, while loans denominated in the Japanese yen dropped to $7.61 billion from $10.26 billion over the cited period, it said.

The foreign-currency loans have been on the decline since they hit $43.10 billion at the end of 2008, the FSS said.

From 2010, the watchdog began to curb foreign-currency lending unless there was actual demand overseas or the lending was to be used for smaller firms' facility investments.

The FSS said the delinquency ratio of banks' foreign-currency loans came in at 0.51 percent as of end-December, down from 0.83 percent a year ago, as lenders pushed to retrieve loans and opted to write off bad loans. (Yonhap)

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