"Investment Fearful, Only Place to Go is Banks"... Over 8 Trillion Won Flooded into Savings and Time Deposits in 20 Days

Deposit and Savings Increase by 8.4449 Trillion KRW in 20 Days at 5 Major Banks
Household Loans Likely to Show Decline for 6 Consecutive Months

[Image source=Yonhap News]

[Asia Economy Reporter Sim Nayoung] During the period of rising interest rates, more than 8 trillion KRW flowed into the time deposit and installment savings products of the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) in just 20 days. On the other hand, household loans are expected to continue declining throughout the first half of this year.

According to the five major banks on the 24th, the balance of time deposits and installment savings (as of the 21st) was recorded at 724.9814 trillion KRW. This is an increase of 8.4449 trillion KRW compared to the end of May (716.5365 trillion KRW). The balance of time deposits was 687.6853 trillion KRW, and the balance of installment savings was 37.2961 trillion KRW.

The inflow of money into banks is analyzed to be due to the instability of investment markets including stocks and coins, as well as the interest rate hikes. The representative interest rates of banks’ time deposit and installment savings products all rose. Hana Bank’s 'Hana Time Deposit (1 year)' was 2.50% per annum as of the 21st, up 1.45 percentage points (p) from a year ago, and Shinhan Bank’s Alssok Savings was 3.20%, up 1.1 p during the same period. Other banks’ deposit and savings products also showed increases ranging from 1 to 2 p.

The balance of household loans at the five major banks (as of the 21st) was 700.4669 trillion KRW, down 59.46 billion KRW compared to the end of May. If this trend continues until the end of this month, the household loan balance will have declined for six consecutive months.

Mortgage loans, centered on Jeonse deposit loans, are showing signs of recovery, but credit loans are still declining. Mortgage loans recorded 506.9797 trillion KRW, an increase of 307.4 billion KRW compared to the end of May. Jeonse loans (133.0247 trillion KRW) increased by 566.5 billion KRW compared to the end of May, leading the overall increase in mortgage loans. On the other hand, credit loans decreased by 632.8 billion KRW to 131.1665 trillion KRW compared to the end of May.

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