Kabang's Record High Performance, but Deposits Drop by 1.5 Trillion... Mixed Fortunes for Inban

[Asia Economy Reporter Buaeri] As interest rates rise, the number of interest rate nomads who manage their finances through savings and time deposits is increasing, intensifying competition among banks for deposit interest rates. In particular, internet-only banks have competitively raised their deposit interest rates, resulting in mixed outcomes. KakaoBank recorded its highest quarterly performance this year but saw its deposit balance decrease by more than 1 trillion won.

According to the financial sector on the 5th, KakaoBank posted an operating profit of 104.6 billion won in the third quarter, marking the highest quarterly figure ever. Net profit also grew by 51.3% year-on-year to 78.7 billion won. However, KakaoBank’s deposit balance at the end of October was 32.9801 trillion won, down 1.5759 trillion won from the previous month.

On the other hand, K-Bank’s deposit balance increased by 810 billion won in just one month to 14.3 trillion won. The contrasting fortunes of the two banks are interpreted as the influence of the financial tech-savvy savers (savings + time deposits + investment) who move according to interest rates. In mid-last month, KakaoBank’s one-year fixed deposit interest rate was up to 3.3% per annum, while during the same period, K-Bank offered up to 4.6% per annum, a difference of up to 1.3 percentage points (p). Moreover, K-Bank’s fixed deposits, especially as an internet-only bank, are considered easier to open or close, facilitating more active transfers.

In fact, K-Bank raised the interest rates on its major installment savings products by up to 1.1 percentage points on the 1st. According to K-Bank, the 'CodeK Flexible Installment Savings' interest rates increased by 0.5% to 0.6%p depending on the subscription period: 6 months (3.6% per annum), 1 year (4.3% per annum), 2 years to less than 3 years (4.35% per annum), and 3 years (4.4% per annum). For the 'Main Transaction Preferential Flexible Installment Savings,' rates were raised by up to 1.1%p: up to 4.3% per annum for 6 months, 5% per annum for 1 year or more, 5.05% per annum for 2 years or more, and 5.1% per annum for 3 years or more.

Meanwhile, loan balances increased for both banks. KakaoBank’s loan balance rose by 25.26 billion won from the previous month to 27.7142 trillion won. K-Bank’s loan balance increased by 35 billion won to 10.13 trillion won compared to the previous month.

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