Banks strive to stem client fund outflow to brokerages amid KOSPI rally

Banks are racing to raise deposit rates and launch products that combine savings with securities, in an effort to prevent outflows amid the KOSPI rally, which has driven a “rapid movement of funds” into the stock market, industry officials said Thursday. Demand deposit balances at the country’s five major banks — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — fell to 614.9 trillion won ($419 billion) as of Wednesday, down 33.4 trillion from the end of September and 12.6 trillion from the end of October. Daily withdrawals this month have averaged 1.14 trillion won. The decline in demand deposits, largely idle funds, is attributed to the stock market rally, as the KOSPI surged more than 20 percent in just over a month, drawing large amounts of liquidity from the banking sector. This prompted banks to raise deposit rates to retain customer funds, despite the Bank of Korea keeping its base rate at 2.5 percent since May. KB Kookmin Bank raised the interest rate on its one-year time deposit from 2.65 percent to 2.7 percent on Wednesday, while Shinhan Bank increased the same termWeiter zum vollständigen Artikel bei Korea Times Weiter zum vollständigen Artikel bei Korea Times