Preliminary figures compiled by the FSS show that bank loans classified as substandard or below (SBLs)—substandard, doubtful, or presumed loss—totaled KRW13.9 trillion at the end of 2004, down KRW4.8 trillion from KRW18.7 trillion a year earlier. The ratio of SBLs to the total outstanding loans dropped to 1.90% from 2.63% a year earlier.

A breakdown of the SBLs shows that SBLs from business loans totaled KRW8.3 trillion (1.92%), compared with KRW4.3 trillion (1.57%) from household loans and KRW1.3 trillion (5.16%) from credit card assets.

Domestic banks resolved or cleaned up SBLs totaling KRW31.1 trillion during 2004. They included loan write-offs totaling KRW12.8 trillion, reclassified SBLs totaling KRW6.6 trillion, and loan collections including disposition of borrower collateral totaling KRW5.7 trillion. New SBLs during 2004 totaled KRW26.2 trillion, compared with KRW35.3 trillion during 2003.

As of the end of 2004, none of the domestic banks had an SBL ratio above 3% (Jeju Bank’s 2.82% was the highest). The SBL ratios for 15 banks fell while those for four banks slightly rose in 2004 (see the attached table for a complete list of the banks and their ratios for 2004).

* Please refer to the attached PDF for details.