Growth of Korea's bank deposits picks up in 2008

SEOUL, March 15 (Yonhap) -- The growth of total bank deposits in South Korea accelerated in 2008 from a year earlier as lenders sold products with higher interest rates to raise funds amid the slumping stock market, the central bank said Sunday.

Outstanding bank total deposits amounted to 1,131.7 trillion won (US$762.1
billion) as of the end of last year, up 11 percent from the previous year,
according to the Bank of Korea (BOK). The 2008 figure accelerated from a 9.4
percent on-year gain in 2007, it added.
Banks' total deposits include demand and time deposits, certificates of deposit
(CDs) and financial bonds.
"Amid the global financial turmoil, people's appetite for safer assets increased,
prompting them to depend on bank deposits," an official at the BOK said.
Lenders' deposits, including demand and time deposits, amounted to 666.3 trillion
won as of the end of last year, up 83.1 trillion won or 14.2 percent from the
previous year. That marked the largest yearly increase since a 83.6 trillion won
gain in 2001, the BOK said.
In the aftermath of the U.S. subprime mortgage rout and subsequent financial
meltdown, the Seoul bourse plunged about 40 percent last year.
Meanwhile, local banks' sales of CDs sharply decreased as the growth of deposits
increased. The issuance of CDs reached 116.6 trillion won, up 3.4 percent from
the previous year. The 2008 readings compared with a 41.4 percent annual gain in
2007, the BOK said.
Local banks are wary of expanding loans to households and smaller firms as the
slowing economy and subsequent corporate overhauls are increasing the amount of
bad assets, compromising their financial health.
sooyeon@yna.co.kr
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