Savings deposits above W1b rise at record pace

Large-sum savings deposits over 1 billion won ($880,000) increased at the fastest pace in eight years in 2018, central bank data showed Sunday.

According to the Bank of Korea, such accounts topped 565.8 trillion won, up 66.6 trillion won, or 13.3 percent from a year earlier.

This marked the steepest on-year increase since 79.4 trillion won in 2010.

Also, the superrich accounts expanded at almost double the pace of savings accounts in general, indicating the polarization in cash savings.

The on-year increase entered a double-digit range last year, while the growth of small sum accounts was around 2 percent.

The visible increase of large amount of savings was largely attributable to the persisting economic uncertainties, which consequently drove companies to prefer liquidity over investments, and research and development, according to the BOK.

“Most of the deposits are by corporate clients ,” said a BOK official.

The uptrend in savings is also in line with the downtrend in infrastructure investment, which declined 4.2 percent last year, marking the steepest fall since the global financial crisis in 2008.

By Bae Hyun-jung (tellme@heraldcorp.com)