The average delinquency rate on small and medium-sized enterprise loans at South Korea’s five major banks reached 0.60% at the end of the third quarter, the highest in nine years and six months. The rate rose from 0.54% a year earlier and has increased each quarter since falling to 0.49% in the fourth quarter of last year. Wholesale and retail businesses recorded the highest sector rate at 0.71%, followed by construction at 0.69%, as delayed consumption recovery and weak construction and real-estate conditions eroded repayment capacity. Overall corporate-loan delinquencies rose to 0.49%, while large-company delinquencies reached 0.18%, partly reflecting defaults involving affiliates under the JoongAng Group’s workout, corporate improvement and rehabilitation procedures. Household-loan delinquencies held at 0.33% from the previous quarter but exceeded the year-earlier level. Separately, the banks’ non-performing loans totaled 7.6133 trillion Korean won at the end of the third quarter, up 20.3% year on year, while estimated loss loans and watch-list loans also increased, pointing to broader credit-quality pressure as borrowing costs remain high.