Stock Market? Housing Deposit? ... Commercial Banks See 'Dormant Money' Plummet in One Month '↓'

Demand Deposits at 5 Major Banks Plunge by 2.85 Trillion Won in October Compared to Previous Month
Contrasting Figures to the Surge in August-September
Interpreted as Result of Public Offering Subscription Boom and Jeonse Price Surge

[Asia Economy Reporter Kim Hyo-jin] The 'idle funds' of major commercial banks, which had been rapidly increasing one after another, significantly decreased last month. This is interpreted as money that had been dormant because it could not find a place to go flowing out massively to the stock market and the jeonse market.

According to the banking sector on the 3rd, the balance of demand deposits at the end of last month for the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?was recorded at 549.7283 trillion won. This is a decrease of 2.8581 trillion won compared to September. This contrasts with August (536.6678 trillion won), which increased by 13.2953 trillion won month-on-month, and September, which increased by 15.9186 trillion won. After nearly 30 trillion won increase over the previous two months, it suddenly turned negative.

Demand deposits are considered a waiting place for large sums of money that cannot find a proper investment destination because, although withdrawals and deposits are free, the interest rate is low.

The balance of demand deposits at the five major banks has repeatedly increased sharply except for January and July this year. It is analyzed that the ultra-low interest rates diluted the advantages of savings deposits, and the financial investment market was depressed due to strengthened management and supervision following major fund accidents since last year.

Meanwhile, the decrease in demand deposits last month is also interpreted as being related to the fact that money released due to the public subscription frenzy for Kakao Games and Big Hit Entertainment stocks is still staying or tied up in the stock market.

A commercial bank official explained, "The impact of 'debt investment,' where people borrow credit loans to buy stocks, seems to have continued until last month," adding, "Idle funds may have been used a lot to put additional money into the stock market or to fill the gap in living expenses caused by investments."

There is also a view that a large outflow of demand deposits occurred due to the skyrocketing jeonse prices. According to the monthly KB Housing Price Trend data from KB Kookmin Bank’s real estate platform LiveOn, the average apartment jeonse price in Seoul last month was 536.77 million won. Considering it was 499.22 million won in July, it surged by 37.55 million won (7.5%) in three months. This is more than five times the average annual increase of 7.18 million won in 2019.

Among the five major banks, excluding Hana Bank, whose data has not yet been finalized, the balance of jeonse loans at the end of last month for the other four banks was 82.145 trillion won, an increase of 2.0559 trillion won compared to September. This increase is noticeably larger compared to August (1.0427 trillion won) and September (1.8908 trillion won).

A commercial bank official analyzed, "Since jeonse prices are rising so steeply, there are many cases where jeonse loans alone are not enough to cover the costs, and in such cases, idle funds can flow out massively."

The official added, "Jeonse listings are so scarce that if you are lucky enough to find one, you have to pay the deposit immediately," adding, "Since unexpected costs are required in the form of urgent cash, it is likely that idle funds are often used first."

This content was produced with the assistance of AI translation services.