Balances up 668.2 billion won in November, surpassing October's full-month gain
Demand deposits fall 19 trillion won over two months
Overdraft account balances at South Korea's five major banks have surpassed 44 trillion won ($33 billion), reaching their highest level in four years and three months. Analysts say investors expecting a stock market rebound are using credit loans to secure funds amid heightened market volatility.
According to the financial sector, the combined overdraft balance at KB Kookmin, Shinhan, Hana, Woori and NH NongHyup Bank stood at 44.26 trillion won as of Thursday — the largest since the end of August 2022, when it reached 44.77 trillion won.
Compared with the end of last month, when the balance was 43.59 trillion won, the figure grew by 668.2 billion won in just 12 days — already exceeding the 611.5 billion won increase recorded over all of October. Since the end of last year, when the balance stood at 39.93 trillion won, it has grown by 4.34 trillion won, or 10.9 percent.
The utilization rate of overdraft accounts — the share of the approved credit limit that borrowers have actually drawn down — is also rising. At one bank, the rate climbed from 43.0 percent at the end of last year to 48.0 percent as of Thursday. At another, it rose from 40.2 percent to 46.1 percent over the same period.
Demand deposits, which can be withdrawn at any time, are moving in the opposite direction. The combined demand deposit balance at the five banks stood at 656.47 trillion won as of Thursday, down 6.88 trillion won from the end of October. Adding last month's outflow of 12.17 trillion won, roughly 19 trillion won has left demand deposit accounts since the end of September.
Banking industry officials interpret the trend as a sign that investors looking to buy stocks on dips are keeping their money out of deposits and readily available for market moves.
Meanwhile, overdraft interest rates at internet-only banks remain elevated. In September, the average rate on newly issued overdraft accounts at K Bank, Kakao Bank and Toss Bank was 7.16 percent per annum, with even high-credit borrowers — those with credit scores between 951 and 1,000 — paying an average of 6.54 percent annually. That is 1.10 percentage points above the five major banks' average of 5.44 percent for the same credit tier.
rim@heraldcorp.com
