South Korea's major banks reduced loans to large companies over the past year as they became more reluctant to lend to them amid a series of massive bankruptcies, industry data showed Sunday.
  

Six lenders, including industry leaders Kookmin Bank and Shinhan Bank, extended a combined 95.7 trillion won ($83.5 billion) in loans to large business at the end of June, down 8.5 percent from 104.7 trillion won a year earlier, according to the data.
  

In South Korea, large companies are widely recognized as a business with more than 1,000 employees or 500 billion won in assets.
  

Hana Bank's big corporate lending fell 21.7 percent on-year to 13.2 trillion won, while that of its sister Korea Exchange Bank decreased 17.9 percent to 14.7 trillion won.
  

Shinhan Bank posted 18.1 trillion won in such loans, down 6.3 percent from a year ago, while Nonghyup Bank and Woori Bank saw their loans drop 8 percent and 0.6 percent, respectively, over the cited period.
  

Loans by No. 1 Kookmin Bank, however, rose 2.1 percent on-year to 17.3 trillion won.
  

Market watchers said the banks have been struggling with recent loan defaults by large companies including Keangnam Enterprises, a local builder that was delisted from the main stock market earlier this year.
  

Recently, Daewoo Shipbuilding & Marine Engineering Co., the country's second-biggest shipyard, will likely undergo large-scale debt restructuring due to massive losses on its balance sheets.
  

Hana Bank set aside 352.9 billion won worth of loan loss reserves for large companies last year, accounting for nearly 40 percent of its total bad loan expenses.
  

Woori Bank's loan provisions for large businesses stood at 1.1 trillion won, while Nonghyup Bank set aside 424.8 billion won.
  

Instead, the lenders increased loans for mid- and small-sized enterprises to 262.8 trillion won as of end-June, up 8.7 percent from 241.8 trillion won the previous year, according to the data.
  

"We are focusing more on lending to SMEs or households, due to higher risks of large company loans," said an official from one of the six banks. (Yonhap)