Business · Economy · 17 hrs ago
Businesses drove South Korean banks’ term-deposit growth as household savings fell
After South Korea’s stock market began to weaken in July, money did not flow back into banks from households.
By the end of October, term deposits at the country’s five major banks had risen by 81 trillion won since July, and businesses provided 96% of that increase.
Over the same period, personal deposits at those banks fell by 5.7 trillion won, and they were down 30.6 trillion won from the end of last year.
The article says households had less spare money to move back into savings, while many individual investors were still tied up in stocks.
Businesses, by contrast, shifted money from accounts paying little or no interest into term deposits paying around 4%, raising banks’ costs for funding.
Net interest margins at four major banks fell in the third quarter, despite higher policy rates.
The shift may put further pressure on bank profits, although the article does not say what happens next.
South Korea’s five largest banks added 81 trillion won in term deposits from July to October, with 96% of the increase coming from businesses and institutions.
Individual term deposits rose only 3.1 trillion won over that period, while total individual deposits fell by 5.7 trillion won.
From the end of last year to October, individual deposits at the five banks declined by 30.6 trillion won.
Businesses shifted funds from demand deposits into higher-rate term deposits, increasing banks’ funding costs.
Net interest margins at four major banks fell in the third quarter.
- Who
- South Korea’s five largest banks, businesses and institutions, and individual depositors.
- What
- Banks’ term deposits grew mainly through business funds, while individual deposits declined.
- When
- From July to October 2026; figures for the five banks are as of the end of October.
- Where
- South Korea.
- Why
- Businesses moved funds from demand deposits into higher-rate term deposits; the article says individual deposits fell as household-held money declined.
This story does not have two clearly opposing sides.
The five banks’ term deposits increased by 81 trillion won, while individual deposits fell by 5.7 trillion won.
The five banks’ term-deposit balances stood at 1,029.8 trillion won and individual deposits at 678.9 trillion won.
Net interest margins at four major commercial banks fell.
- Five-bank term deposits, end of October
- 1,029.8 trillion won
- Term-deposit increase since July
- 81 trillion won; businesses and institutions accounted for 77.9 trillion won
- Individual term deposits, change since July
- Up 3.1 trillion won
- Individual deposits, change since last year-end
- Down 30.6 trillion won to 678.9 trillion won
- Household-held M2, end of August
- 2,173.5 trillion won
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