[The Crisis in Secondary Financial Sector]② Savings Banks and Saemaeul Geumgo Face Capital Outflow 'Distress'

The secondary financial sector is struggling with deposit outflows. Both savings banks and Saemaeul Geumgo have seen their deposit balances decline since the beginning of this year. The secondary financial sector has recently been actively attracting deposits through interest rate hikes.

According to the Bank of Korea's Economic Statistics System on the 19th, the deposit balance of mutual savings banks as of the end of April was 114.6159 trillion KRW. This is a decrease of 1.4272 trillion KRW compared to the previous month (116.0431 trillion KRW).

Deposits at savings banks have been steadily decreasing this year. The deposit balance, which reached 120.7854 trillion KRW in January, decreased monthly by an average of 2.0565 trillion KRW in February (118.9529 trillion KRW), March (116.0431 trillion KRW), and April (114.6159 trillion KRW).

In the case of mutual finance, the deposit balance has shown an increasing trend this year, but there are differences among cooperatives. While credit unions have seen an increase in deposit balances, Saemaeul Geumgo continues to experience fund outflows.

The deposit balance of Saemaeul Geumgo recorded its lowest point this year at 258.2811 trillion KRW as of the end of April. Saemaeul Geumgo's deposit balance has decreased by more than 3 trillion KRW each month from 265.2700 trillion KRW in February to 262.1427 trillion KRW in March and 258.2811 trillion KRW in April.

In particular, the fund outflow from Saemaeul Geumgo contrasts with the increase in deposit balances of other cooperatives. The deposit balance of mutual finance stood at 475.3615 trillion KRW as of the end of April, up 2.9979 trillion KRW from the previous month (472.3636 trillion KRW), and credit unions increased by 37.04 billion KRW to 136.7913 trillion KRW compared to the previous month.

The fund outflow from Saemaeul Geumgo appears to be influenced by the insolvency crisis that emerged in March. In Saemaeul Geumgo's case, the 'real estate project financing (PF)-related insolvency crisis theory' spread, causing anxiety among financial consumers. Savings banks also faced growing anxiety as malicious rumors about a loss of over 1 trillion KRW circulated.

To prevent deposit outflows, the secondary financial sector, including savings banks, has introduced high-interest products to attract financial consumers. Savings banks are offering high-interest deposit products, including deposits with interest rates in the 4% range and high-interest parking account products. As of the 16th, OK Savings Bank's 'OK e-Ansimp App Plus Time Deposit' offers an annual interest rate of 4.41%, and Dongyang Savings Bank provides a 4.35% time deposit. OK Savings Bank recently launched a parking account offering up to 5% interest.