KB Kookmin and Shinhan Lower Loan Interest Rates One After Another... Interest Rate Competition Among Banks

[Asia Economy Reporter Bu Aeri] Commercial banks are consecutively lowering their loan interest rates. With the disclosure of the loan-deposit interest rate spread starting, a 'game of nerves' seems to have begun.

According to the financial sector on the 24th, KB Kookmin Bank will reduce the interest rate of its mixed-rate (fixed rate) mortgage loan products by 0.2 percentage points starting from the 25th.

A Kookmin Bank official said, "We temporarily lowered mortgage loan interest rates to ease the interest burden on financial consumers during the period of rising interest rates and to promote the use of products favorable to customers."

Shinhan Bank also lowered the fixed interest rate (5-year financial bond benchmark rate) and variable interest rate (COFIX benchmark rate) for mortgage loans aimed at living stabilization funds by 0.2 percentage points and 0.1 percentage points, respectively. The interest rates for all variable interest rate (COFIX and 1-year financial bond benchmark rate) and fixed interest rate jeonse deposit loans were uniformly reduced by 0.2 percentage points. Most personal credit loan products, including salaried worker credit loans, saw interest rate cuts of 0.3 to 0.5 percentage points.

NH Nonghyup Bank will apply preferential interest rates of up to 0.5 percentage points and 0.3 percentage points to NH Sae Hope Holssi Loans and NH Youth Jeonse Loans starting from the 26th.

The banks' moves are partly interest rate support measures, but the consensus is that with the start of the loan-deposit interest rate spread disclosure, banks have become more conscious of it. They cannot help but be aware of the monthly disclosed loan-deposit interest rate spread to avoid criticism of 'profiting from interest.'

According to the Korea Federation of Banks, among the five major banks, Shinhan Bank had the largest household loan-deposit interest rate spread at 1.62 percentage points, followed by Woori Bank (1.4 percentage points), NH Nonghyup Bank (1.4 percentage points), KB Kookmin Bank (1.38 percentage points), and Hana Bank (1.04 percentage points).

The household loan-deposit interest rate spread, first disclosed on the 22nd, is the value obtained by subtracting the interest rate on savings deposits from the household loan interest rate. The average loan-deposit interest rate spread is calculated by adding corporate loans to household loans. The larger these figures, the lower the deposit interest rates and the higher the loan interest rates, which has become a report card on banks' interest profit practices.

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