Warning Signs of SME Distress... Large Companies' Spare Cash Tops 150 Trillion Won

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[Financial News] As bad loans among small and medium-sized enterprises are expanding rapidly, large companies' funds are instead flowing into banks, highlighting a clear divide between the two groups. There are concerns that this gap could widen further if additional benchmark rate hikes are added to the mix.
According to the financial sector on the 17th, the average ratio of non-performing loans in all won-denominated lending at the five major banks, KB Kookmin Bank, Shinhan Financial Group, Hana Bank, Woori Bank and NH NongHyup, stood at 0.42% at the end of April. That was up 0.04 percentage point from the previous month’s 0.38%. Compared with the end of last year’s 0.34%, the increase widened to 0.08 percentage point.
In particular, the trend differed sharply by borrower type. The non-performing loan ratio for SMEs stood at 0.63%, more than twice the 0.31% seen at large companies. By contrast, the large-company ratio fell 0.04 percentage point over the same period, maintaining a stable trend.
The deterioration in SME loans was also evident by bank. At some banks, the SME non-performing loan ratio jumped 0.17 percentage point in just one month between March and April. The increase appears to reflect the conversion of large corporate exposures into bad loans. At another bank, the overall corporate non-performing loan ratio rose to 0.5%, the highest level in about five years and five months since the COVID-19 outbreak.
Delinquency rates showed a similar pattern. At the end of April, the five major banks' overall delinquency rate stood at 0.44%, up 0.03 percentage point from the previous month. Within that, the SME delinquency rate reached 0.65%, about eight times the 0.08% recorded for large companies. Large-company delinquency rates, meanwhile, continued to ease, showing a stable trend.
In particular, the balance of MMDA deposits at the five major banks reached 157.8659 trillion won as of the 14th, surpassing 150 trillion won for the first time on record. MMDA is a representative product used by companies to manage short-term surplus funds. The surge is being attributed to an influx of large-company money, helped by improved cash flow from strong semiconductor exports.
Meanwhile, the industry sees the interest-rate environment as a factor that could accelerate the divide going forward. If rates rise further, SMEs will face heavier interest burdens and stronger repayment pressure, while large companies are more likely to maintain stable financial structures backed by ample cash reserves.
moving@fnnews.com Lee Dong-hyuk Reporter