Mutual Savings 3 Trillion Won Over Deposit Insurance Limit

Mutual savings companies have been found to be more than 3 trillion won($2.3 billion) over the deposit insurance coverage limit, according to financial industry officials. Deposits at credit cooperatives exceeding insurance coverage was more than half a trillion won.

Data obtained from the Korea Federation of Mutual Savings and Finance Companies on Sunday shows that the 50 million won ceiling per account for deposit insurance coverage was exceeded by 3.03 trillion won.

Changes introduced in January assured depositors they will get the guaranteed amount back in principal and interest back in the event of financial firm failure.

The data also shows that a quarter of the total deposit accounts at mutual savings companies had a balance exceeding 50 million won.

There were a total of 10.4 million depositors with accounts at 124 mutual savings companies as of the end of May. The combined deposit balance was 18.03 trillion won.

An official at the federation said the accounts that exceed the insurance ceiling are most likely corporate accounts at mutual savings companies generally believed to be sound.

The total deposit balance at credit cooperatives was just over 19.9 trillion won at the end of March, the official said. Of that, he said, 572 billion won exceeded the insurance ceiling.

But there has also been a large increase in the proportion of accounts with smaller balances. More than 98 percent of depositors had savings at a single mutual savings bank that were less than 50 million won, compared with 74 percent at the end of 1999.

by Choi Hyeon-chul