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South Korea looking into banks' corporate loan risk amid rising interest rates

South Korea's central bank and financial regulator are jointly examining the risk in corporate lending for some banks amid rising interest rates, The Korea Times reported May 13, citing an unnamed official from the regulator.

The Bank of Korea and the Financial Supervisory Service plan to look into the loan book, lending terms and corporate risk management division of Industrial Bank of Korea, Woori Bank, KEB Hana Bank and BNK Kyongnam Bank. The report said the four lenders have potential financial vulnerabilities due to their high exposure to corporate borrowers.

An 11-member special inspection team has been looking into Industrial Bank of Korea since the week of May 7, and the inspections of other banks will begin May 16, the report noted.

The central bank and the regulator may issue a correction order to the banks if any noncompliance is found.