The difference between the deposit rates and loan rates of major banks has widened for the eighth month. This is because deposit rates have sharply declined due to cuts in the benchmark interest rate, while loan rates have not decreased easily, citing reasons such as household loan management.
According to the Korea Federation of Banks on the 6th, the interest rate gap on household loans handled by the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup) was between 1.38 and 1.55 percentage points in March. NH NongHyup had the largest gap at 1.55 percentage points. Shinhan Bank recorded 1.51 percentage points, KB Kookmin recorded 1.49 percentage points, Hana Bank recorded 1.43 percentage points, and Woori Bank recorded 1.38 percentage points. Expanding the scope to 19 domestic banks, Jeonbuk Bank had the largest gap at 7.17 percentage points.
In particular, the interest rate gap for Shinhan and Hana banks is the largest since the Federation of Banks began relevant disclosures in July 2022. The gap at KB Kookmin has expanded the most since January 2023. Woori Bank reached its largest gap in two years and one month, while NH NongHyup saw its largest gap in one year and four months.
The interest rate gap is the difference between the loan rates that banks charge for lending money and the rates they pay to depositors, serving as a source of bank revenue. A larger interest rate gap means that banks earn more profit.
Banks are likely to keep loan rates unchanged for the time being. This is due to the need to curb the increase in household loans, which rose last month. In April, the five major banks' household loans increased by 4.5337 trillion won compared to the previous month. This is the largest increase since September of last year, which was 5.6029 trillion won.