▲ A passerby walks past a poster promoting house mortgage loans at a bank in central Seoul, in this June 15, 2025, file photo. (Yonhap)

SEOUL, Sept. 2 (Yonhap) -- South Korean banks' bad-loan ratio rose in the second quarter of the year from three months earlier due to a rise in soured debts, data showed Wednesday.

Loans classified as substandard or below (SBL) held by local lenders came to 18.9 trillion won (US$13.8 billion) as of end-June, up 1.2 trillion won from three months earlier, according to the data from the Financial Supervisory Service.

The proportion of SBLs to the total outstanding loans came to 0.63 percent at the end of June, up 0.03 percentage point vis-a-vis the first three months of 2026.

Some 7.2 trillion won in loans were newly classified as soured in the second quarter, up 1.7 trillion won from the previous quarter.

Local banks wrote off 6.1 trillion won worth of bad loans in the April-June period, also up 1.7 trillion won from the previous quarter, according to the data.

The ratio of business loans classified as SBLs stood at 0.77 percent as of end-June, up 0.03 percentage point from three months earlier.

The ratio for household loans came in at 0.33 percent as of end-June, also up 0.01 percentage point from three months earlier, according to the financial watchdog.

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