Loan guarantees among affiliates of South Korea's major conglomerates surged about 2.8-fold in 2015 from the previous year, the country's corporate watchdog said Sunday.

According to the Fair Trade Commission, loan guarantees made among the affiliates of the nation's 61 conglomerates came to a little over 2.04 trillion won ($1.8 billion) as of April 1, compared with just 738.8 billion won tallied a year earlier.

The jump is attributed to the addition of one business group to the government's watch list of conglomerates that are restricted from making equity investments or offering loan guarantees to one another.

In 2014, there were 63 conglomerates with assets exceeding 5 trillion won that were on the watch list, but this year the number slipped to 61, although Jungheung Construction was included for the first time.

"Jungheung's affiliate had loan guarantee arrangements totaling 1.56 trillion won, so if this is not counted, the overall number stands at 485 billion won, or down 253.8 billion won, or 34 percentage points, from last year," the FTC said. "Excluding new entries that pushed up the numbers in 2011 and again this year, conglomerates have steadily resolved their loan guarantees among affiliates."

Of the 61 business groups, only 10 had loan guarantee arrangements that have been banned since April 1998, it said. In 1998, cross-loan guarantees among the country's largest conglomerates stood at 63.5 trillion won.

The FTC said that even among the 10, only three are obliged to get rid of their loan guarantees, with the remaining seven allowed to maintain this system for a set number of years for managerial and industrial restructuring reasons.

Of the three, data showed Halla, a conglomerate with businesses in auto parts and construction, and energy company Samchully, had a combined $22.2 billion won in outstanding loan guarantees, down sharply from 156.6 billion won in 2014.

Jungheung has a grace period of two years before it has to resolve its loan guarantee issue.

"Even among permissible loan guarantees, the size has fallen to 462.8 billion won this year from 582.2 billion won in 2014, with Hanjin Group accounting for 72.1 percent of the total," the antitrust agency said.

Hanjin's loan guarantee, which stood at 333.6 billion won, is mainly due to industrial restructuring, with the conglomerate that owns Korean Air and Hanjin Shipping expected to resolve this reliance from 2017 onward.

South Korea's fair trade law imposes strict limits on large business groups aimed at curbing their hold on the market and prodding them to improve their corporate governance structures.

Loan guarantees have been cited as one of the reasons why Asia's fourth-largest economy was hit hard by the 1997-98 Asian financial crisis. (Yonhap)