Seoul: South Korean banks' bad-loan ratio increased in the first quarter of the year compared to three months earlier, primarily due to a decrease in the write-offs of soured loans, data showed Friday. Loans classified as substandard or below (SBL) held by local banks totaled 17.7 trillion won (US$11.7 billion) as of the end of March, rising by 1.1 trillion won from three months earlier, according to the data from the Financial Supervisory Service.

According to Yonhap News Agency, the proportion of SBLs to the total outstanding loans was 0.6 percent at the end of March, marking an increase of 0.03 percentage points from three months ago. In the first quarter, approximately 5.5 trillion won in loans were newly classified as soured, a decrease of 400 billion won from the previous quarter. Local banks wrote off 4.4 trillion won worth of bad loans during the January-March period, which was 1.3 trillion won less than the previous quarter.

The ratio of business loans classified as SBLs stood at 0.74 percent as of the end of March, reflecting an increase of 0.04 percentage points from three months earlier. Similarly, the ratio for household loans was 0.32 percent as of the end of March, showing an increase of 0.01 percentage point from three months earlier, according to the financial watchdog.