August Household Loan-Deposit Interest Rate Spread 0.936 Percentage Points
The household loan-deposit interest rate spread (loan interest rate - deposit interest rate) of the five major banks (Kookmin, Shinhan, Hana, Woori, NongHyup) increased for the second consecutive month. According to the Korea Federation of Banks on the 27th, based on the new transaction amount in August, the household loan-deposit interest rate spread excluding policy-based low-income financial products (such as Saessal Loan Bank and Saessal Loan 15) was recorded at 0.936 percentage points.
The household loan-deposit interest rate spread in July was 0.934 percentage points, showing an increasing trend for two consecutive months. By bank, NongHyup Bank and Woori Bank saw an expansion compared to the previous month. NongHyup Bank's household loan-deposit interest rate spread last month was 1.15 percentage points, the highest among the five major banks. Woori Bank was at 0.99 percentage points. Kookmin Bank remained the same as the previous month at 0.92 percentage points. Shinhan Bank (0.90 percentage points) and Hana Bank (0.72 percentage points) saw decreases.
In the case of NongHyup Bank, government policy funds account for a high proportion of deposits. A NongHyup Bank official said, "Government policy funds are in the form of ultra-short-term fixed deposits with a maturity of about 1 to 3 months, so their interest rates tend to be lower than other deposit products," adding, "This makes the loan-deposit interest rate spread appear larger than that of other banks."
Based on balance and excluding policy-based low-income financial products, Kookmin Bank had the largest household loan-deposit interest rate spread at 2.49 percentage points. It was followed by NongHyup Bank (2.39 percentage points), Shinhan Bank (2.34 percentage points), Woori Bank (2.16 percentage points), and Hana Bank (2.05 percentage points).
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