SEOUL, Oct. 13 (Yonhap) -- Outstanding loans extended to risky real estate development projects fell in the second quarter of the year via sell-offs or recapitalization, the financial watchdog said Tuesday.

According to the Financial Supervisory Service (FSS), 15.1 trillion won (US$11.3 billion) in loans extended to real estate projects were classified as risky at the end of June.

The reading marks a drop from 16.4 trillion won at the end of March.

The end-June figure accounted for 9 percent of total exposure by financial institutions to real estate development at 168.8 trillion won, which also marks a drop from 9.6 percent at the end of March last year and 169.8 trillion won, respectively.

The remaining risky PF loans will be restructured as well, the watchdog said.

PF loans have been one of the sticky issues in the financial market as a rise in soured loans, which started in late 2023, was feared to hurt financial institutions and the overall financial stability in the market.

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