Samsung Securities Lowers Margin Loan Interest Rates... Securities Industry Also Follows

[Asia Economy Reporter Lee Jung-yoon] The securities industry is also consecutively lowering interest rates on margin loans.

Samsung Securities announced on the 17th that it will reduce the interest rates on margin loans by 0.1 to 0.4 percentage points by segment, mainly for customers who open accounts non-face-to-face. The interest rates on margin loans for periods exceeding 90 days will be lowered not only for non-face-to-face customers (from 10.2% to 9.8%) but also for branch and bank-linked account customers (from 10.1% to 9.8%).

With this guideline change, Samsung Securities' margin loan interest rates have all been set below 10%. This will be applied starting from the 23rd.

Earlier, Korea Investment & Securities also announced that it would lower the highest segment interest rate on margin loans (over 30 days) from 9.9% to 9.5% by 0.4 percentage points for customers who open accounts at banks or non-face-to-face.

Recently, banks have been criticized for making huge profits from loan-deposit margins during high interest rate periods and then distributing them as bonuses and voluntary retirement payments, leading to what is seen as a money feast.

Securities firms also appear to be joining the effort to lower interest rates under similar pressure. Although market interest rates such as negotiable certificates of deposit (CD) and commercial paper (CP) rates have stabilized since the beginning of the year, there have been virtually no securities firms that have lowered margin loan interest rates reflecting this.