SEOUL, May 29 (Xinhua) -- Loan delinquency rate among South Korean insurance companies rose in the first quarter as market rates went higher on expectations for higher policy rate, financial watchdog data showed Tuesday.
Debts owed by households and companies to insurers amounted to 210.9 trillion won (195.8 billion U.S. dollars) as of end-March, up 1.5 percent from three months earlier, according to the Financial Supervisory Service (FSS).
Household loans added 0.7 percent to 117.3 trillion won (108.9 billion U.S. dollars) in the cited period, with corporate loans growing 2.5 percent to 92.9 trillion won (86.3 billion U.S. dollars).
Delinquent loans, overdue at least one month, stood at 0.52 percent of the total as of end-March, up 0.01 percentage point from three months ago.
The delinquency rate for household debts advanced 0.04 percentage points to 0.56 percent. The figure for mortgage loans rose 0.02 percentage point to 0.33 percent, while the rate for credit loan jumped 0.12 percentage points to 1.42 percent.
The bad loan rate for household debts, which were borrowed on credit, picked up at a faster pace than other loans as market rates rose fast on expectations for the Bank of Korea (BOK)'s policy rate hike.
The BOK raised its benchmark interest rate in November last year to 1.5 percent from an all-time low of 1.25 percent, the first rate increase in almost six and a half years.
The BOK's target rate was lower than the U.S. Federal Reserve's benchmark rate of a range of 1.50-1.75 percent.
If the BOK belatedly lifts its policy rate, foreign capital could abruptly flow out of the South Korean financial market.
The bad loan ratio for corporate loans, extended by insurers, fell 0.01 percentage point from three months earlier to 0.50 percent as of end-March.
