SEOUL, June 20 (Xinhua) -- South Korea's corporate capability to pay interest cost with operating profit worsened in 2018 on economic slowdown, a central bank report showed Thursday.

The average ratio of operating profit to interest cost among 21,213 companies subject to external audit came in at 5.9 last year, down from 6.3 a year earlier, according to the Bank of Korea (BOK)'s financial stability report submitted to the parliament.

It was attributed to the economic slump. Real gross domestic product (GDP), adjusted for inflation, grew 2.7 percent in 2018 from a year earlier, marking the lowest in six years.

Excluding the electrical and electronic sector that enjoyed a boom last year, the profit-to-interest ratio stood at 3.9 in 2018, recording the lowest in three years.

The portion of companies with the ratio below 1, which indicates the inability to pay interest cost with profit, came to 32.1 percent of the total last year, the highest since the BOK began compiling the data in 2010.

Among big corporations, 23.6 percent posted the profit-to-interest ratio below 1, lower than 34.0 percent for small companies.

More than half of shipbuilders saw the ratio below 1 last year. Carmakers and real estate developers with the ratio below 1 accounted for 37.8 percent and 42.7 percent each of the total.

The portion of companies, which recorded the profit-to-interest ratio below 1 for three straight years, reached 14.1 percent of the total in 2018, up 0.4 percentage points from the previous year.

Outlook for the profit-to-interest ratio was dim this year on the continued fall in export, which accounts for about half of the economy.

The export kept skidding for six straight months through May amid the global economic slump, caused by the U.S. protectionist moves, and the downturn in business cycle of the global semiconductor industry.

The BOK report said that if the worsening of global trade dispute reduces the revenue of key exporters by 6 percent, the average ratio of operating profit to interest cost would decline to 5.1 from 5.9 last year.

Under the same scenario, the portion of companies with the ratio below 1 would surge to 37.5 percent from 32.1 percent last year.

Negatively affected by the export fall, the country's real GDP diminished 0.4 percent in the January-March quarter from the previous quarter.

Meanwhile, the household debt growth slowed as the government unveiled a set of measures to control speculative investment in the real estate market.

Household debt reached 1,540 trillion won (1.3 trillion U.S. dollars) as of the end of March, up 4.9 percent from a year earlier. The growth rate continued to slow down since 2017.

The ratio of household debt to disposable income was 158.1 percent in the first quarter, up 1.9 percentage points from a year earlier. It indicated a faster expansion in household debts than income.

The rate of financial asset to financial debt among households also rose 2.1 percentage points over the year to 48.1 percent in the quarter, showing a faster increase in household debt than asset. Enditem

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