S. Korea's corporate bankruptcies rebound on seasonal factors

Corporate bankruptcies in South Korea rebounded last month due to seasonal factors, central bank data showed Thursday.

The number of companies that went belly-up gained 20 from a month earlier to 88 in January after falling 16 in the prior month, according to the Bank of Korea (BOK).

Companies, which failed to redeem promissory notes and checks, trended down last year as local lenders became generous toward small companies in terms of loans. The reading fell to the record low of 58 in June last year.

"Corporate failures increased last month on an on-month basis, but there's no need to worry about it given the monthly average bankruptcies were around 84 last year," an official at the BOK told Xinhua.

The official said that company failures tended to get volatile in December and January, noting that small firms in the service sector mainly increased last month.

The number of corporate failures in the manufacturing industry reduced 5 on-month in January, but those for the service and building sectors jumped 22 and 5 respectively.

The number of newly established firms expanded 249 from a month earlier to 6,930 in January. The ratio of start-ups to company failures was 100.4 last month, down from 136.3 in the prior month.

The default rate on corporate bills, including promissory notes and checks, came in at 0.17 percent in January, down from 0.18 percent in the previous month.