Seoul: Bank deposits in South Korea have been shrinking rapidly, with households also increasingly boosting their overdraft loans to secure funds for investments amid surging real estate and stock prices, data showed Sunday.
According to Yonhap News Agency, combined demand deposits at five major lenders -- KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup -- stood at 649.53 trillion won (US$451.3 billion) as of Thursday, down 20.19 trillion won from the end of September, based on data from the banks. This represents an average daily outflow of 877.9 billion won, with deposits projected to fall by about 27 trillion won by the end of the month, marking the steepest decline in 15 months since July 2024.
A significant portion of the demand deposits is believed to have flowed into the real estate and stock markets amid the recent investment boom. Household loans are also on the rise, largely driven by credit loans centered around overdraft accounts as recent regulations have made it harder to secure home-backed loans.
The balance of credit lines at the five major banks stood at 104.52 trillion won, up 713.4 billion won from 103.81 trillion won at the end of September. Notably, the balance of overdraft accounts rose sharply by 530.9 billion won from 38.79 trillion won at the end of last month, marking the largest increase since August 2024.