Business
Banks’ fund raising jumps due to deposit growth
Published : Jan 24, 2011 - 18:21
Updated : Jan 24, 2011 - 18:21
Korean banks raised more funds last year than 2009 as risk-averse investors piled into lenders’ savings deposits, the financial regulator said Monday.

Eighteen local banks’ fund raising through deposits and debt issuance expanded by a net 35.5 trillion won ($31.7 billion) last year, bringing their outstanding funds to 1,161.4 trillion won as of the end of December, the Financial Supervisory Service (FSS) said.

Last year’s growth marks a sharp increase from a net increase of just 14.8 trillion won in 2009, the FSS said.

The strong growth is attributable to increased demand for time deposits, triggered by preference for safer assets rather than stocks or real estate, deemed risky amid uncertain market conditions, the FSS noted.

Banks’ deposit holdings jumped by a net 133.4 trillion won to an outstanding 907.7 trillion won last year while their issuance of debts like certificates of deposits and bank bonds plunged by a net 97.9 trillion won to 253.7 trillion won, the watchdog said.

Growth of banks’ funds under management, meanwhile, decelerated in 2010 from a year earlier following a reduction in lending to companies, according to the FSS.

Banks’ funds under management increased by a net 36.9 trillion won to an outstanding 1,246.4 trillion won as of end-December, compared with a net growth of 44.1 trillion won in 2009, the regulator said.

The results came after banks’ loan issuance grew by a net 32.4 trillion won to an outstanding 991.2 trillion won, decelerating from a 41 trillion won increase a year earlier while their holdings of securities expanded by a net 4.5 trillion won to 255.2 trillion won, the watchdog noted. 

(Yonhap News)
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