September End Sub-Deposit Growth Rate 1.5%... Preference for Safe Assets Weakens, Growth Rate Narrows

September-end Deposits Total 2,456.9 Trillion Won

[Asia Economy Reporter Park Sun-mi] At the end of September last year, insured deposits increased by only 1.5% compared to the end of the previous quarter. Although liquidity was supplied through policies responding to the novel coronavirus disease (COVID-19), leading to an increase in insured deposits, the preference for safe assets weakened, resulting in a reduced growth rate.

According to the insured deposit trends announced by the Korea Deposit Insurance Corporation on the 7th, as of the end of September last year, the total insured deposits amounted to 2,456.9 trillion won, showing a 1.5% (37.3 trillion won) increase compared to the end of the previous quarter. Insured deposits refer to deposits protected by the Korea Deposit Insurance Corporation, excluding government and financial institution deposits, corporate insurance, and performance-linked retirement pensions among the financial products protected by the Corporation.

The growth rate compared to the previous quarter was 3.9% at the end of March, 3.4% at the end of June, and 1.5% at the end of September, showing a decreasing trend. Although the spread of COVID-19 and the resulting restrictions on economic activities continued, the preference for safe assets eased, leading to a decrease in the growth of insured deposits.

Insured deposits at banks and savings banks recorded 1,496 trillion won and 67 trillion won, respectively, increasing by 1.3% and 1.5% compared to the end of the previous quarter. Compared to the growth rates of 4.5% and 6.4% at the end of June last year, the increase rates have significantly narrowed. In particular, among bank insured deposits, demand deposits increased by 2.9%, but savings deposits, especially the largest category, time deposits, decreased by 1.2%.

Insured deposits at insurance companies have maintained a growth rate in the 1.1% range for six consecutive quarters since June 2019, affected by stagnation in the domestic insurance market and an increase in policy cancellations due to economic downturn. As of the end of September last year, they were recorded at 829.5 trillion won. On the other hand, insured deposits at financial investment companies (investor deposits) increased by 16.2% compared to the end of the previous quarter due to a booming stock market, reaching 62.5 trillion won.

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