Saemaeul Geumgo Deposit Recovery... Savings Banks Also Increasing

The deposit balance of Saemaeul Geumgo, which had been declining since the beginning of the year, is showing signs of recovery. Savings banks also saw a slight increase in deposit balances as they introduced high-interest deposit and savings products.

According to the Bank of Korea Economic Statistics System on the 16th, the deposit balance of Saemaeul Geumgo as of the end of June was 259.4624 trillion KRW. This is an increase of 848.3 billion KRW compared to the previous month (258.6141 trillion KRW), marking two consecutive months of growth. Compared to the end of April (258.2811 trillion KRW), when funds were rapidly withdrawn, it increased by 1.1813 trillion KRW.

Saemaeul Geumgo’s deposit balance had been continuously decreasing due to liquidity crisis rumors triggered by worsening delinquency rates on real estate-related loans in March. The deposit balance dropped from 265.27 trillion KRW at the end of February to 262.1427 trillion KRW at the end of March, and further down to 258.2811 trillion KRW at the end of April, losing over 6 trillion KRW in two months.

Last month, a bank run (massive deposit withdrawal) crisis emerged, prompting the formation of an intergovernmental response team including the Ministry of the Interior and Safety, the Financial Services Commission, and the Financial Supervisory Service. Swift action prevented large-scale deposit outflows. A representative from the Saemaeul Geumgo Central Association stated, "Even after the crisis in July, Saemaeul Geumgo’s deposits have considerably recovered, and the shaken atmosphere has disappeared," adding, "We expect the recovery trend to accelerate further."

The deposit balance of mutual finance, which had turned downward last month, also increased by 2.5049 trillion KRW to 476.5815 trillion KRW as of the end of June, compared to the previous month (474.0766 trillion KRW). However, credit unions experienced a decline in deposit balances for two consecutive months. As of June, the deposit balance of credit unions was 136.2492 trillion KRW, down by 28 billion KRW from the previous month (136.2772 trillion KRW). Compared to April (136.7913 trillion KRW), it decreased by 54.21 billion KRW.

The deposit balance of savings banks, which had been decreasing monthly since February, also showed a slight increase. As of the end of June, the deposit balance of mutual savings banks was 114.887 trillion KRW, up by 36.1 billion KRW from the previous month (114.526 trillion KRW).

This trend is attributed to the continuous introduction of high-interest products in the secondary financial sector. According to the Bank of Korea, the average deposit interest rate of Saemaeul Geumgo in June (based on new 1-year fixed deposits) was about 4.23%. Mutual savings banks recorded 4.08%. These rates are 0.47 percentage points and 0.32 percentage points higher than the average for deposit banks (3.76%), respectively.

In particular, high-interest products such as 5% range deposits and 10% range special savings promotions have recently reappeared in mutual finance and savings banks. A financial industry insider explained, "As the re-deposit period for last year’s high-interest special promotions returns, there is a need to meet customers’ expectations, which is why high-interest special promotions are reemerging."

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