Non-performing loans at South Korean banks reached 18.9 trillion won ($13.9 billion) at the end of June, the highest level since June 2018, after rising 1.2 trillion won from the previous quarter. Corporate loans accounted for more than 80% of the total, with corporate NPLs increasing to 15.2 trillion won as small and medium-sized businesses recorded a sharp rise in new defaults. Newly classified NPLs totaled 7.2 trillion won in the second quarter, including 5.7 trillion won from corporate lending. Banks held 26.9 trillion won in loan-loss provisions, but the provision coverage ratio fell to 142.9% from 150.4% in the previous quarter and 165.5% a year earlier. The Financial Supervisory Service said overall soundness remained satisfactory but urged proactive management as vulnerable-sector NPL ratios rise, geopolitical risks persist and interest rates could increase domestically and internationally.