Return to profit

摘要

Years of toiling to clear their balance sheets of dud assets appear to have paid off for South Korean banks. They are now in a much better position to withstand the failures of lumbering business groups known as chaebol. The banks' asset quality has improved significantly, thanks to massive write-offs of bad loans, while the economic situation has remained favourable for lenders. However, the South Korean banks now have to deal with bad loans from individuals. After the 1997 financial crisis, Korean banks shifted more of their lending business towards consumers and small and mid-sized firms, often without looking closely into their credit-worthiness. Their strategic move was in tune with the South Korean policymakers' thinking that boosting private spending could offset a drastic fall in overseas demand.