'Series of Adverse Events' Mutual Finance Deposits at End of May Turn Negative for First Time This Year

The deposit balances of the secondary financial sector, which had been engulfed in various crisis rumors such as a sharp increase in delinquency rates, are now on a decline. In the case of mutual savings banks, where deposit balances had surged monthly due to high-interest special promotions, the balance decreased by 1 trillion won.

According to the Bank of Korea's Economic Statistics System on the 18th, the deposit balance of mutual savings banks stood at 474.0766 trillion won as of the end of May, down by 1.2849 trillion won from the previous month (475.3615 trillion won). The deposit balance, which had been increasing by an average of about 4 trillion won every month since January this year, turned to a decline for the first time at the end of May.

The decrease in deposit balances in the mutual savings sector appears to be due to a combination of factors, including the rise of crisis rumors about the secondary financial sector following a sharp increase in delinquency rates and a reduction in high-interest special promotions compared to the beginning of the year. A financial authority official said, "During the period of special promotion competition, there was a lot of movement within the mutual savings sector, but recently, as concerns about the secondary financial sector have grown, the trend is shifting away from moving within mutual savings banks and rather moving toward post office deposits and the like."

In the case of credit unions, the deposit balance decreased by 514.1 billion won to 136.2772 trillion won from the previous month (136.7913 trillion won). Credit unions had also seen a steady increase in deposit balances since January this year, but it was the first decline in May.

On the other hand, Saemaeul Geumgo (New Village Credit Cooperatives) breathed a sigh of relief as their deposit balances returned to an upward trend. Saemaeul Geumgo had continuously seen a decline in deposit balances due to liquidity crisis rumors triggered by worsening delinquency rates on real estate-related loans in March. The deposit balance of Saemaeul Geumgo at the end of May was 258.6141 trillion won, an increase of 333 billion won from the previous month (258.2811 trillion won). According to the Saemaeul Geumgo Central Association, the deposit balance at the end of June rose again by more than 1 trillion won in two months to 259.5 trillion won.

The deposit balances of savings banks have also shown a steady decline every month this year. As of the end of May, the deposit balance of mutual savings banks was 114.526 trillion won, down by 89.9 billion won from the previous month (114.6159 trillion won), and decreased by 6.2594 trillion won compared to the beginning of the year (120.7854 trillion won).

Meanwhile, there are statistics indicating that after the recent Saemaeul Geumgo bank run (massive deposit withdrawals) incident, the deposit balances of other mutual savings institutions and savings banks increased. According to data received by Lee Yong-woo, a member of the Democratic Party of Korea, from the Financial Supervisory Service, as of the 10th, the deposit balances of Nonghyup, Suhyup, and credit unions totaled 604.3 trillion won, an increase of 2.4 trillion won compared to the end of June (601.9 trillion won), and savings banks saw a slight increase to 115 trillion won.

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