"Lending Rates Up, Deposit Rates Down... Banks See Household Loan-Deposit Margin Widen for First Time in 5 Months"

From 1.262% in December to 1.504% in January
Household Loan-Deposit Margins Also Widen at Three Major Internet Banks

Last month, the household loan-deposit interest margin at the five major commercial banks increased for the first time in five months. The margin widened as lending rates rose and deposit rates fell.

According to disclosures from the Korea Federation of Banks on February 27, the average household loan-deposit interest margin at the five major banks (KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup), excluding policy-based inclusive finance, stood at 1.504 percentage points in January. The household loan-deposit interest margin is calculated by subtracting the savings deposit interest rate from the household loan interest rate.

This figure is up 0.242 percentage points from the previous month’s average of 1.262 percentage points. Previously, the household loan-deposit margin at these banks had been declining for four consecutive months.

The average household loan interest rate at the five major banks, excluding policy-based inclusive finance, rose from 4.166% in December last year to 4.27% in January this year, an increase of 0.104 percentage points. In contrast, the average savings deposit interest rate fell from 2.904% to 2.766%, a decrease of 0.138 percentage points.

Since 2018 until June this year, a total of 14,426 automated teller machines (ATMs) have been removed from banks over approximately six years. On the 24th, ATMs from commercial banks are installed along a street in downtown Seoul. Banks are rapidly withdrawing ATMs due to maintenance costs, including ATM management and heating and cooling expenses. Photo by Yongjun Cho jun21@

By bank, the household loan-deposit margin in January was highest at Shinhan Bank with 1.57 percentage points, followed by Hana Bank at 1.55 percentage points, Nonghyup Bank at 1.49 percentage points, KB Kookmin Bank at 1.46 percentage points, and Woori Bank at 1.45 percentage points. Compared to the previous month, the month-on-month increase was 0.29 percentage points at KB Kookmin and Hana, 0.26 percentage points at Woori, 0.19 percentage points at Nonghyup, and 0.18 percentage points at Shinhan.

Internet-only banks also saw their household loan-deposit margins widen. KakaoBank’s margin increased from 1.34 percentage points to 1.49 percentage points, while K Bank’s margin rose from 2.20 percentage points to 2.63 percentage points.

In particular, Toss Bank’s household loan-deposit margin surged by 1.37 percentage points in a single month, jumping from 2.23 percentage points to 3.60 percentage points. During this period, the average savings deposit rate fell from 2.55% to 2.47%, while the household loan interest rate soared from 4.78% to 6.07%.

This content was produced with the assistance of AI translation services.