Business · Companies · 1 hr ago
South Korean banks attract deposits as rates rise and stocks fall
After deposits fell early in the month amid concerns following a financial-sector hacking incident, money began returning to banks in South Korea.
The five largest banks had about 16 trillion won flow into term deposits in a week, and their combined balance reached about 1,017.8 trillion won on October 15.
Banks raised rates by as much as 0.6 percentage points, and Shinhan Bank offered a one-year deposit paying up to 4% a year, subject to conditions and a 500 billion won limit.
A decline in the stock market and increased volatility also encouraged some people to choose term deposits as a safer option.
These deposits lock money away for a set period, while demand deposits can be accessed more readily; demand-deposit balances were still about 19.9 trillion won below the previous month’s end.
Banks said that movement of company funds and changes in money held for investing also contributed to the drop in demand deposits.
Deposits at South Korea’s five largest commercial banks rose sharply after banks raised rates and stock markets weakened.
As of October 15, their combined time-deposit balance was 1,017.8351 trillion won, up 11.748 trillion won from the end of the previous month.
The balance had fallen by 4.4242 trillion won by October 6 amid concern after a financial-sector hacking incident.
Banks raised key time-deposit rates by up to 0.6 percentage points, and Shinhan Bank introduced a one-year deposit offering up to 4% interest.
A stock-market correction and increased volatility also encouraged some investors to seek the relative safety of time deposits.
- Who
- South Korea’s five largest commercial banks: KB Kookmin, Shinhan, Hana, Woori and NH NongHyup.
- What
- Their time-deposit balances rose as banks increased rates and stock-market volatility encouraged demand for deposits.
- When
- By October 15, after a decline earlier in the month.
- Where
- South Korea.
- Why
- Higher deposit rates and stock-market uncertainty contributed to the increase; the article also links an earlier decline to concern after a financial-sector hacking incident.
This story does not have two clearly opposing sides.
The five banks’ combined time-deposit balance was 1,006.0871 trillion won.
The balance had fallen to 1,001.6629 trillion won, 4.4242 trillion won below the end-of-September level.
Shinhan Bank launched a one-year time deposit offering a maximum annual rate of 4%, subject to conditions and a 500 billion won limit.
Woori Bank raised the one-year rate on its WON Plus Deposit from 3.5% to 3.6%.
The five banks’ combined time-deposit balance reached 1,017.8351 trillion won.
- Five banks
- KB Kookmin, Shinhan, Hana, Woori and NH NongHyup
- Time deposits, October 15
- 1,017.8351 trillion won
- Increase from end of September
- 11.748 trillion won
- Shinhan special deposit
- Up to 4% annual interest; 500 billion won limit
- Demand deposits, October 15
- 655.6587 trillion won, down 19.8662 trillion won from end of September