South Korean banks' loan delinquency ratio rebounded last month as local lenders reduced their resolution on overdue loans, the financial watchdog said Tuesday.

The rate of bad loans overdue for more than one day came in at 1.08 percent of the total bank loans to companies and households as of the end of January, up 0.19 percentage points from a month earlier, according to the Financial Supervisory Service (FSS).

The January rebound came as domestic banks were reluctant to resolve overdue loans following massive resolution at the end of last year. The growth in new delinquent loans also contributed to the rise in the delinquency ratio.

Overdue loans resolved shrank by 7.3 trillion won (6.46 billion U.S. dollars) in January from the previous month, while fresh delinquent loans grew 0.6 trillion won over the same period.

The delinquency ratio of banks' corporate lending stood at 1.34 percent as of end-January, up 0.24 percentage point from a month before. The default rate for large corporations rose 0.05 percentage point to 0.3 percent, with the corresponding rate for small- and mid-sized enterprises (SMEs) jumping 0.31 percentage point to 1.65 percent.

The default rate of banks' household lending reached 0.78 percent as of end-January, up 0.11 percentage point from the previous month. The delinquency ratio for home-backed loans, which account for most household loans, was up 0.08 percentage point to 0.69 percent, with the rate for other household loans such as credit loans climbing 0.18 percentage point to 0.98 percent.

Meanwhile, sour loans in project-financing (PF) real estate loans, which led last year's default rise, contracted last month, but bad loans in shipbuilding and shipping industries grew slightly.

The delinquency ratio for the PF loans dipped 0.17 percentage point on-month to 5.44 percent in January, but the corresponding rates for loans to shipbuilders and shipping companies jumped 1.28 percentage points and 0.24 percentage point each to 3.44 percent and 1.64 percent last month.