Overdue real estate-related loans at South Korea’s 79 savings banks rose 15.6% to 2.694 trillion won in the first half, even as total related lending barely changed. Loans tied to real estate project financing, construction and property stood at 24.216 trillion won at the end of June, up just 0.08% from the end of last year, indicating a sharp deterioration in asset quality. Forty lenders had property-related delinquency rates above 10%, up from 35 at the end of last year, while three exceeded 30%: KB Savings Bank at 35.1%, Sangsangin Savings Bank at 30.83% and Daemyung Savings Bank at 30.07%. Other lenders above 20% included Sangsangin Plus Savings Bank, Raon Savings Bank, Samho Savings Bank and SBI Savings Bank. Regional property weakness, unsold homes, higher construction costs and prolonged high interest rates are delaying the normalization of troubled project-finance sites. Provincial regions accounted for 71% of nationwide unsold homes at the end of July and 85% of homes still unsold after construction. Bridge-loan extensions are adding interest costs and further weakening project viability. Across the financial sector, project-finance exposure fell to 169.8 trillion won at the end of March, but loans assessed as caution or at risk of default rose to 16.4 trillion won.