(MENAFN - Qatar News Agency) Overdue debts owed by South Korean companies shot up 13.1% in August from a month earlier, as the global downturn sapped their overall performance, a report showed Thursday.
Local listed firms' combined overdue balance, which includes interests on arrears, reached 8.5 trillion won (US7.63 billion) at the end of August, up 1 trillion won from the previous month, according to the latest report submitted by the Bank of Korea (BOK) to parliament.
The report is based on the central bank's analysis of corporate loans extended by 14 commercial and state-run lenders. The on-month figure had trended downward to 5-7 trillion won in the first half of this year, after surging to 8-10 trillion won in 2009 in the wake of the 2008 financial crisis.
But it rose again to 6.2 trillion won in June, reaching a yearly high in August, the data showed. The surge came as the majority of firms saw their earnings worsen this year, hit by the global jitters stemming from the Eurozone debt crisis and a slump in the U.S. and China.
"The global economic downturn has weakened the companies' payment capabilities," said Lee Han-deuk, an economist from LG Economic Research Institute (LGERI).
The report said that a rise in overdue debts owed by large companies is especially troubling. Such debts soared 44.6% on-month to 1.7 trillion won in August and grew more than two-fold compared with May.