As of end-September, 1998, total nonperforming loans (loans classified as either substandard, doubtful or estimated loss) of 22 commercial banks stood at 22.42 trillion won, representing a drop of 6.65 trillion won, or 22.9%, compared to total NPL of 29.77 trillion won at end-June, 1998. This leaves the NPL ratio at end-September, 1998 at 7.1%, a 1.5%p drop from the 8.6% recorded as of end-June, 1998. Total loans amounted to 314.54 trillion won at end-September, 1998.

In the 3rd quarter of 1998, 2.62 trillion won worth of loans were reclassified as nonperforming owing to strengthening of loan classification standards (refer to [ Strengthening of Loan Classification Standards and Provisioning Requirements] below), whereas 4.45 trillion won were newly classified as nonperforming. Nonetheless, total NPL dropped during this period due to sale of NPLs worth 13.28 trillion won to the Korea Asset Management Corporation.

* Please refer to the attached file for details.