June Savings and Deposits Increase by 20 Trillion Won... Household Loans Decline for 6 Consecutive Months

Money Flows into Deposit Products Amid Full-Scale Interest Rate Hikes
Household Loans Decline for 6 Consecutive Months...Fall Below 700 Trillion Won

[Asia Economy Reporter Minwoo Lee] As the period of interest rate hikes has fully begun, nearly 20 trillion won flowed into bank savings and time deposits again last month, following the previous month. On the other hand, household loans have been decreasing for six consecutive months this year.

According to the financial sector on the 1st, the total balance of regular savings and time deposits at the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) as of the end of last month was 735.8692 trillion won (time deposits 698.4049 trillion won, regular savings 37.4643 trillion won). This is an increase of 19.3327 trillion won compared to the end of the previous month. Considering that last month also saw an increase of 19.9375 trillion won compared to the previous month, about 20 trillion won flowed into savings and time deposits for two consecutive months. Compared to the end of last year, savings and time deposits increased by 45.8326 trillion won.

As the interest rate hike period began, banks raised the interest rates on deposit products, attracting investment sentiment. The Bank of Korea raised the base interest rate five times from August last year to May this year. Accordingly, the base rate soared from 0.50% to 1.75% in less than a year. It is expected that the Financial Monetary Policy Committee meeting on the 14th of this month will raise the rates further.

Meanwhile, household loans continue to decline steadily. As of the end of last month, the balance of household loans at the five major commercial banks was 699.6521 trillion won, a decrease of 1.4094 trillion won compared to the previous month. With six consecutive months of decline this year, the balance fell below 700 trillion won.

During the same period, unsecured loans also decreased by 1.1204 trillion won to 130.6789 trillion won. The balance of mortgage loans was 506.7714 trillion won, an increase of 0.0981 trillion won compared to the previous month. Jeonse (key money) loans also increased by 0.4479 trillion won during this period, reaching 132.9061 trillion won.