The delinquency rate on South Korean banks’ won-denominated loans rose to 0.63% at the end of July 2026, the highest July reading since 2016, according to preliminary data released by the Financial Supervisory Service on Aug. 22. The rate, based on principal or interest payments at least one month overdue, increased 0.07 percentage points from June and 0.06 percentage points from a year earlier. New delinquencies totaled 3.2 trillion won, up 600 billion won from the previous month, while delinquent-loan cleanups fell by 3.9 trillion won to 1.4 trillion won after large quarter-end reductions in June. The FSS said new delinquencies linked to corporate rehabilitation and workout proceedings at JoongAng Group affiliates drove the reversal. Corporate-loan delinquencies rose to 0.78%, with large-company loans climbing to 0.36%, their highest level since July 2021. SME loans reached 0.91%, including 1.00% for small and medium-sized corporations and 0.77% for sole proprietors. Household-loan delinquencies increased to 0.42%; mortgage delinquencies were 0.29%, while non-mortgage household loans, including credit loans, rose to 0.84%. The FSS warned that higher market interest rates and external economic uncertainty could increase pressure on vulnerable borrowers and said it would encourage provisioning and active sales and write-offs of non-performing loans.