As of the end of 2001, the total amount of substandard or below loans (SBLs) at 1,550 financial companies stood at 35.1 trillion won, a drop of 29.5 trillion won (45.7%) from the 64.6 trillion won recorded at the end of 2000. The net amount of SBLs— total SBLs less total loan loss provisions—also fell 16.3 trillion won to 15.3 trillion won. As a result, the proportion of SBLs to total loans fell 5.0 percentage points from 10.4% to 5.4%, and the ratio of net SBLs to net total loans (total loans less loan loss provisions) fell 2.9 percentage points from 5.4% to 2.5% during the period. The total amount of non-performing loans (NPLs)—the sum of loans 3 months or more past due as well as loans in nonaccrual status—also fell 18.9 trillion won to 31.3 trillion won in 2001.

Overall, the yearly drop in SBLs was mainly due to the disposal of bad loans through ABS (16.7 trillion won), extensive write-offs (14.8 trillion won) and loan recovery (10.0 trillion won).

* Please refer to the attached file for details.