Corporate deposits at banks rose by W35tr in 2016

Published : Feb 13, 2017 - 10:55 Updated : Feb 13, 2017 - 10:55

Corporate deposits held by South Korean banks increased 10.2 percent on-year in 2016, marking the fastest growth in six years as businesses shunned major investments amid an economic downturn, data by the Bank of Korea showed Monday.

Business deposits at banks rose to 383.4 trillion won ($332.4 billion) at the end of 2016, up 35.4 trillion won from the end of 2015, according to the BOK data.

(Yonhap)

It was the fastest growth since 2010, when corporate deposits went up 52.5 trillion won.

Household deposits at banks rose 3.8 percent on-year, or 21.5 trillion won, to 580.7 trillion won last year.

The growth rate of corporate deposits at banks had surpassed that of household deposits in recent years, a sign that businesses are holding more cash in their bank accounts due to economic uncertainties.

Last year, South Korea's growth rate of facility investment fell to a seven-year low of minus 2.4 percent.

The data suggested that when companies saw their earnings rise, their investment and hiring activities became stagnant.

The BOK left the base rate at 1.25 percent for a seventh consecutive month in January, while it cut its forecast for the gross domestic product this year to a growth of 2.5 percent, from the 2.8 percent projected in October.

The BOK's latest growth estimate was lower than the government's forecast of 2.6 percent growth released at the end of last year. (Yonhap)