S. Korean banks' H1 deposits see lowest growth in 5 years

SEOUL, Sept. 2 (Yonhap) -- South Korean banks' deposits grew at the slowest pace
in five years in the first half of this year as they sold fewer bonds amid
sluggish lending, the central bank said Wednesday.

As of the end of June, outstanding deposits held by 54 local lenders stood at
1,143.5 trillion won (US$914.1 billion), up 11.8 trillion won, or 1 percent, from
six months earlier, the Bank of Korea (BOK) said in a report.
The six-month growth rate marked the slowest pace since a 1 percent contraction
registered for the second half of 2004, according to the central bank.
Banks' deposits include demand and time deposits, certificates of deposits (CDs)
and financial bonds.
"On the back of slower growth in loans, lenders reduced bond issuances because
they needed less funding for loan extensions," said a BOK official.
The banks' demand and time deposits, which accounted for 61.3 percent of the
total deposits, amounted to 700.6 trillion won as of end-June, up 5.2 percent
from the end of last year, the BOK said.
Bond sales by the lenders, meanwhile, shrank 5 percent to 236.2 trillion won, the
central bank added. Debt financing represents 20.7 percent of total deposits.
In light of a global financial rout, local banks have shied away from extending
loans as they struggle to shore up their balance sheets.
pbr@yna.co.kr
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