Seoul: South Korean banks' bad-loan ratio declined in the third quarter from three months earlier due to a fall in newly soured loans, data showed Thursday. Loans classified as substandard or below (SBL) held by local banks came to 16.4 trillion won (US$11.1 billion) as of end-September, down 0.2 trillion won from three months earlier.

According to Yonhap News Agency, the percentage of SBLs to the total outstanding loans came to 0.57 percent at the end of September, down 0.02 percentage point from three months ago. Some 5.5 trillion won in loans were newly classified as soured in the third quarter, down 0.9 trillion won from the previous quarter.

Local banks wrote off 5.6 trillion won worth of bad loans in the July-September period, also down 0.9 trillion won from the previous quarter, according to the data. The ratio of business loans classified as SBLs stood at 0.71 percent as of end-September, down 0.01 percentage point from three months earlier. The ratio for household loans came in at 0.30 percent as of end-September, also down 0.02 percentage point from three months earlier, according to the financial watchdog.