[Asia Economy Reporter Song Hwajeong] Amid the commencement of comparative disclosure of loan-deposit interest rate spreads, Jeonbuk Bank was found to have the largest loan-deposit interest rate spread among 19 banks.
According to the July loan-deposit interest rate spread disclosure posted on the Korea Federation of Banks website on the 22nd, Jeonbuk Bank's household loan-deposit interest rate spread was 6.33 percentage points (P), the highest among all banks. Toss Bank (5.60%P), K Bank (2.46%P), Kakao Bank (2.33%P), and Gwangju Bank (3.39%P) followed. On the other hand, the bank with the lowest loan-deposit interest rate spread was Busan Bank (0.82%P).
Among the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NongHyup?Shinhan Bank had the highest household loan-deposit interest rate spread at 1.62%P. Woori and NongHyup Banks were tied at 1.40%P, KB Kookmin Bank at 1.38%P, and Hana Bank at 1.04%P.
Last month, the loan-deposit interest rate spread for the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH NongHyup) was 1.21%P, and for internet banks, it was 3.48%P. The household loan-deposit interest rate spread was 1.37%P for the five major banks and 3.46%P for internet banks. The larger spread in internet banks is due to their goal of maintaining a mid-interest loan ratio of 25% or more within total loans.
When accessing the loan-deposit interest rate spread comparison on the Korea Federation of Banks Consumer Portal, loan interest rates, corporate loan interest rates, household loan interest rates, savings deposit interest rates, loan-deposit interest rate spreads, and household loan-deposit interest rate spreads for 19 banks are displayed. The loan-deposit interest rate spread is the value obtained by subtracting the savings deposit interest rate from the loan interest rate, and the household loan-deposit interest rate spread is the value obtained by subtracting the savings deposit interest rate from the household loan interest rate. For Jeonbuk Bank, which showed the highest household loan-deposit interest rate spread, the household loan interest rate was 9.46%, and the savings deposit interest rate was 3.13%. The household loan-deposit interest rate spread is calculated for 18 banks excluding the Korea Development Bank, which does not handle personal finance. The simple average of the household loan-deposit interest rate spread for these banks was 1.98%P.
The Korea Federation of Banks explained that the loan-deposit interest rate spread can expand or contract depending on each bank's loan and deposit portfolio. The spread expands when ▲ the proportion of loans to medium- and low-credit borrowers is high, ▲ the proportion of mortgage loans is low and unsecured loans are high, ▲ the proportion of policy products for low-credit borrowers is high, and ▲ the basic interest rate on savings deposits is low but preferential interest rates confirmed at maturity are high. Conversely, the spread contracts when ▲ the proportion of financial bond issuance is high and ▲ deposits are raised at high interest rates for liquidity management. Jeonbuk Bank, which had the largest spread, expanded its spread due to a high proportion of loans linked to the Korea Inclusive Finance Agency, such as the Sunshine Loan Bank and Sunshine Loan Youth. Toss Bank, which ranked second, expanded its spread by handling only unsecured loans without collateral. Shinhan Bank's active support for loans for low-income households, such as Sunshine Loan and New Hope Loan, also influenced its spread. According to the Korea Federation of Banks, Shinhan Bank's loans for low-income households amounted to 975.1 billion KRW last year, the highest among the four major banks.
By entering the loan interest rate comparison, one can check the loan-deposit interest rate spread by loan type and credit score. For installment mortgage loans, the loan interest rate and loan-deposit interest rate spread were 2.16%P for Jeonbuk, 2.07%P for Kakao Bank, 1.94%P for NH NongHyup, and 1.91%P for Jeju Bank. Among the four major banks, KB Kookmin was 1.15%P, Shinhan 1.51%P, Woori 1.83%P, and Hana 1.09%P. Although Shinhan had the largest household loan-deposit interest rate spread overall, Woori Bank had the largest spread for installment mortgage loans.
The household loan-deposit interest rate spread can also be checked by credit score brackets. Since loan interest rates and loan-deposit interest rate spreads are disclosed together by credit bureau (CB) credit scores (from 1000 points in 50-point increments across 9 brackets), one can easily see the loan interest rates and spreads applied to each bracket. For general unsecured loans, in addition to the loan-deposit interest rate spread and average interest rate by credit score, the average interest rate and spread excluding inclusive finance are separately provided.
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