Bank loans classified as substandard or below (SBLs)–substandard, doubtful, or presumed loss–totaled KRW9.75 trillion at the end of the first quarter of 2006, up slightly from KRW9.72 trillion at the end of 2005. During the same period, the ratio of SBLs to the total outstanding loans fell from 1.22% to 1.20%, the lowest level since the forward-looking criteria were first adopted in 1999. A drop in newly distressed loans during the quarter mainly contributed to the lower SBL ratio.

Distressed loans disposed during the quarter totaled KRW2.9 trillion, down KRW2.2 trillion from the previous quarter. The drop was mainly due to seasonal factors, but the pace of distressed loan disposition is expected to pick up in the second quarter.

SBL ratios fell for corporate loans and credit card receivables but rose slightly for household loans.

* Please refer to the attached PDF for details.