The interest rate spread between deposits and loans at the five major commercial banks has widened for the third consecutive month. While deposit rates have been falling rapidly in line with the interest rate cut cycle, loan rates have been declining more slowly due to strengthened household debt management measures.
According to the Korea Federation of Banks' announcement on September 30, the average household loan-to-deposit interest rate spread, excluding policy-based loans for low-income individuals, at the five major commercial banks-KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup-stood at 1.48 percentage points last month. This is an increase of 0.12 percentage points from the previous month's average of 1.468 percentage points.
The loan-to-deposit interest rate spread is calculated by subtracting the deposit interest rate from the loan interest rate. The spread at the five major banks narrowed slightly in April and May, but has widened for three consecutive months since June.
Last month, the average household loan interest rate, excluding policy-based loans for low-income individuals, at the five major banks was 3.966%. This is a decrease of 0.014 percentage points from the previous month's average of 3.98%. The average deposit interest rate last month was 2.486%, down 0.026 percentage points from the previous month.
By bank, the household loan-to-deposit interest rate spread (excluding policy-based loans for low-income individuals) was highest at Nonghyup Bank with 1.66 percentage points, followed by Shinhan Bank at 1.50 percentage points, KB Kookmin Bank at 1.44 percentage points, Hana Bank at 1.43 percentage points, and Woori Bank at 1.37 percentage points.
Nonghyup Bank saw its spread widen by 0.19 percentage points in just one month, from 1.47 percentage points in July. During the same period, Hana Bank's spread increased by 0.01 percentage points. Shinhan Bank maintained its spread, while Woori Bank and KB Kookmin Bank saw their spreads narrow.
Among the 19 banks subject to disclosure, including internet-only banks, regional banks, and foreign banks, Jeonbuk Bank recorded the largest household loan-to-deposit interest rate spread (excluding policy-based loans for low-income individuals) at 5.86 percentage points. The smallest spread was at Sh Suhyup Bank, at 1.14 percentage points.
Among internet-only banks, K Bank recorded a spread of 2.93 percentage points, followed by Toss Bank at 1.88 percentage points, and Kakao Bank at 1.72 percentage points.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
