11.07.2001
ODL ratio worsens

• CBC announced 3Q01 ODL ratio for domestic banks hit 7.8%, an increase of 1.3% QoQ. Ratio jumps to 11.5% after accounting for restructured debt. Figures indicate that loan quality has further deteriorated in the last quarter. Poor economic environment continues to affect debt repayment ability for certain enterprises as well as individuals, while typhoon Nari and 911 attacks have also hampered loan growth. CBC indicated that after RTC subsidizes loan loss for the 36 credit cooperatives, the ratio will decline again. However, we believe that unless the disposal of NPLs can be sped up, the RTC may not be able to control increases in new overdue loans.