South Korean banks projected the credit risks of South Korean companies to remain high in the fourth quarter of this year amid economic uncertainties, central bank data showed Thursday.

An index measuring small and medium companies’ credit risks came in at 28 for the October-December period, remaining unchanged from the previous quarter, according to the survey of 16 local banks conducted by the Bank of Korea.

Credit risks refer to the likelihood of borrowers being unable to repay debt. A reading above zero means that the degree of credit risks is high.

The central bank noted that due to a delay in the country’s economic recovery, risks of new insolvencies linger in some ailing industries.

The credit risks of large companies came in at 13, unchanged from the previous quarter, due to concerns over weakening earnings and the Japanese yen’s depreciation.

The credit risks of households, however, fell to 16 from 19 as an improvement in household loan structure and an August rate cut helped reduce debt. (Yonhap)