April Deposit: 23 Trillion Won – Where?
- SEOUL, South korea (May 2, 2025) – Amidst increasing volatility in both the global stock market and the virtual asset sector, liquidity in South Korea is experiencing notable...
- The combined required deposit and MMDA balance at KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup Bank totaled 629.3498 trillion won last month, according to data released by...
- One banking official suggested that increased stock market volatility may be influencing investor behavior.
South Korean Liquidity Fluctuates Amidst market Volatility
SEOUL, South korea (May 2, 2025) – Amidst increasing volatility in both the global stock market and the virtual asset sector, liquidity in South Korea is experiencing notable fluctuations. Money market deposit accounts (MMDA) at five major commercial banks saw a decrease in required deposits last month, contrasting with figures from the previous month.
MMDA Balances Decline
The combined required deposit and MMDA balance at KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup Bank totaled 629.3498 trillion won last month, according to data released by the banks today. This represents a decrease of nearly 23 trillion won compared to March. In April, the required deposits of these five commercial banks exceeded 22.6473 trillion won,a shift from the 26.85 trillion won recorded the previous month.
Market Volatility and Investor Behavior
One banking official suggested that increased stock market volatility may be influencing investor behavior. “The stock market volatility has increased,” the official stated, “and it is estimated that many people have entered the market as the U.S. stock market has fallen substantially.”
Another financial expert pointed to corporate financial cycles as a contributing factor. “Companies tend to move funds after quarterly settlement, and this seems to be reflected in the recent changes,” the expert noted.
Cryptocurrency Market Impact
The cryptocurrency market has also played a role. Bitcoin, after reaching a peak of over $100,000, experienced a decline to $80,000 before partially recovering to around $90,000 recently.
Increase in Credit Loans
Concurrently,credit loans have seen an uptick. As of the end of April,the five banks reported a total of 102.49 trillion won in outstanding credit loans, an increase of 8.868 trillion won from the previous month.
This increase marks the largest in six months, following a 1.92 trillion won rise in October of the previous year. Credit loans, which include negative accounts, typically increase during periods of heightened activity in the stock market, such as initial public offerings (IPOs), or during surges in the cryptocurrency market.
Household and Corporate Lending Trends
Both household and corporate loans have also increased. Household loans reached 743.84 trillion won last month, up 4.53 trillion won from March. Housing-related loans, including mortgages, accounted for 589.43 trillion won of this total,an increase of 3.7495 trillion won. However, a significant portion of the mortgage and charter loan increases are attributed to policy loans.
Corporate loans, which had previously been contracting, showed signs of recovery with an increase of over 6 trillion won last month. However, large loans accounted for 4.3271 trillion won, or 71.3%, of this increase, while loans to small and medium-sized enterprises (SMEs) and the self-employed increased by only 1.74 trillion won.
Given that the balance of large corporate loans (166.3443 trillion won) is approximately one-quarter the size of loans to SMEs and the self-employed (664.93 trillion won), the increase in lending to large companies is especially noteworthy.
South Korean liquidity adn lending Trends: A Deep Dive
What’s Happening with South Korean Liquidity?
According to a report released on May 2, 2025, liquidity in South Korea is experiencing fluctuations amidst volatility in the global stock market and the virtual asset sector. Money market deposit accounts (MMDA) at five major commercial banks saw a decrease in required deposits last month.
How are MMDA Balances Changing?
The combined required deposit and MMDA balance at KB Kookmin,shinhan,Hana,Woori,and NH Nonghyup Bank totaled 629.3498 trillion won last month. This represents a decrease of almost 23 trillion won compared to March. In April, the required deposits of these five commercial banks exceeded 22.6473 trillion won, a shift from the 26.85 trillion won recorded the previous month.
Key takeaway: MMDA balances are decreasing, indicating shifting liquidity dynamics.
What Factors are Influencing These Changes?
several factors contribute to these shifts:
- Stock Market volatility: Increased volatility in the stock market might be affecting investor behavior, with some entering the market as the U.S. stock market has fallen.
- Corporate Financial Cycles: Companies tend to move funds after quarterly settlements, which seems to be reflected in recent changes.
- Cryptocurrency Market: The cryptocurrency market, particularly Bitcoin, saw a peak, decline, and partial recovery, influencing market behavior.
Are Credit Loans Increasing?
Yes, credit loans are experiencing an uptick. As of the end of April, the five banks reported a total of 102.49 trillion won in outstanding credit loans,an increase of 8.868 trillion won from the previous month. This increase is the largest in six months.
Credit loans, which include negative accounts, tend to increase during periods of heightened activity in the stock market or during surges in the cryptocurrency market.
what’s the Impact of cryptocurrency Market on the South Korean economy?
The cryptocurrency market influences the South Korean financial landscape. Bitcoin, after reaching values above $100,000 fell, and partially recovered. Fluctuations in the cryptocurrency market can impact credit loan activity.
What are the Trends in household and Corporate Lending?
both household and corporate loans have increased.
- Household Loans: Reached 743.84 trillion won last month, up 4.53 trillion won from March. Housing-related loans, including mortgages, accounted for 589.43 trillion won of this total, increasing 3.7495 trillion won. A significant portion of mortgage and charter loan increases is attributed to policy loans.
- Corporate Loans: Showed signs of recovery with an increase of over 6 trillion won last month. Large loans accounted for 4.3271 trillion won, or 71.3%, of this increase, while loans to small and medium-sized enterprises (SMEs) and the self-employed increased by only 1.74 trillion won.
How do Corporate Loan Trends Look?
Corporate loans are recovering. The increase is primarily driven by large corporate loans.
Given that the balance of large corporate loans (166.3443 trillion won) is approximately one-quarter the size of loans to SMEs and the self-employed (664.93 trillion won),the increase in lending to large companies is especially noteworthy.
Key Lending Trends in South Korea (April 2025)
Here’s a summary of the key lending figures:
| Loan Type | Amount (Trillion Won) | Change from Previous month (Trillion Won) |
|---|---|---|
| Credit Loans (Total) | 102.49 | +8.868 |
| Household Loans (Total) | 743.84 | +4.53 |
| Housing-Related Loans | 589.43 | +3.7495 |
| Corporate Loans (Total) | Increase of over 6 | N/A |
| Large Corporate Loans | 4.3271 | N/A |
| Loans to SMEs and Self-Employed | 1.74 | N/A |
Note: Data as of April 2025, based on details from five major South korean commercial banks.