Bank deposits see largest growth in 4 months in Jan.

SEOUL, Feb. 10 (Yonhap) -- Deposits at South Korean banks grew by the most in four months in January due to lenders' efforts to lower their loan-deposit ratios and attract more funds, the central bank said Wednesday.

Bank deposits reached an outstanding 1,023.2 trillion won (US$885.1 billion) as
of the end of January, up 15.7 trillion won from a month earlier, according to
the Bank of Korea (BOK). The January reading marked the largest monthly increase
since September 2009 when bank deposits grew by 16.5 trillion won.
"Banks' time-deposits increased by the biggest amount ever last month as lenders
made efforts to cut their loan-deposit ratios and sell higher-yielding financial
products to attract more funds," an official at the BOK said.
Local banks will be required to keep their loan-to-deposit ratios, a gauge of a
bank's solvency, below 100 percent down the road, a move aimed at encouraging
them to beef up their financial soundness and liquidity management.
Lenders' time deposits increased by a record 23.1 trillion won on-month to 400.1
trillion won, the BOK added.
Meanwhile, local banks' corporate loans rose by 4.2 trillion won to 510.4
trillion won as of the end of last month, compared with an 11.7 trillion won fall
in December, when bank corporate lending fell by a record amount as companies
repaid debts to bolster balance sheets and lenders made efforts to clean up bad
loans.
The data comes a day before the BOK makes its monthly interest-rate decision. The
central bank is widely forecast to freeze the benchmark seven-day repo rate at a
record low of 2 percent for the 12th straight month.
The bank cut the base rate by a total of 3.25 percentage points between October
2008 and February 2009 in an effort to bolster the economic slowdown.
sooyeon@yna.co.kr
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