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Photo = Industrial Bank of Korea |
[Alpha Biz= Paul Lee] IBK Industrial Bank of Korea's disposal of non-performing loans (NPLs) has increased for the third consecutive year.
According to data titled "IBK Industrial Bank of Korea NPL Disposal Status" submitted by the bank to Rep. Kim Sang-hoon of the People Power Party during a National Assembly Financial Services Commission meeting on Thursday, the bank sold 282 billion KRW worth of NPLs in the first quarter of this year alone.
The bank plans to sell an additional 1.3588 trillion KRW over the remainder of the year, bringing the total NPL disposal amount to 1.6408 trillion KRW. This is an increase of 280 billion KRW compared to last year’s disposal amount of 1.6128 trillion KRW.
The NPL disposal amount by IBK Industrial Bank showed a decline in 2020 (953.7 billion KRW), 2021 (795.5 billion KRW), and 2022 (582.5 billion KRW). However, in 2023, the amount exceeded 1 trillion KRW, reaching 1.0428 trillion KRW, and has continued to increase each year. Over the past five years, the total NPL disposal amount by the bank is expected to reach 6.6321 trillion KRW.
Compared to major commercial banks, IBK’s NPL disposal amount is significantly higher—up to four times greater. For reference, last year, KB Kookmin Bank disposed of 416.7 billion KRW in NPLs, Shinhan Bank disposed of 851.8 billion KRW, and Hana Bank disposed of 1.2238 trillion KRW.
IBK Industrial Bank of Korea’s main clients are small and medium-sized enterprises (SMEs). The bank’s market share of SME loans last year was 23.65%. As the economic downturn worsens, the business environment for SMEs has become increasingly difficult, which has been reflected in the rising NPLs. As of the end of last year, IBK's non-performing loan ratio (NPL ratio) stood at 1.34%, a 0.29 percentage point increase from 1.05% at the end of 2023.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
