Five biggest banks now control 81% of deposits

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Five biggest banks now control 81% of deposits

Korea’s banking industry is dominated by the country’s top five banking groups as they fiercely vie to inflate their assets through a series of mergers and acquisitions, industry data showed yesterday.

According to data compiled by the Financial Supervisory Service, the country’s top five players - Woori Finance Holdings, KB Financial Group, Hana Financial Group, Shinhan Financial Group and the National Agricultural Cooperative Federation (Nonghyup) - accounted for 71.4 percent of the banking sector’s outstanding loans as of end-September.

They also gobbled up around 80.6 percent of 854 trillion won ($759 billion) in total deposits, and the number of their branches nationwide reached 5,563, or around 74 percent of the total, the data showed.

Their strong footing in the banking segment strikes a stark contrast to their presence in 2000.

The top players accounted for 41.6 percent and 48.4 percent, respectively, in the lending and deposit market in 2000, according to the data.

The Asian financial crisis that hit the nation in late 1997 changed the banking sector’s landscape, as the sector was overhauled through a series of mergers and acquisitions.

The data also showed the top five players’ nine banking units logged a combined 10.1 trillion won in profit last year, accounting for 84.4 percent of the total profit of 12 trillion won racked up by the country’s 18 banks.

Shinhan Financial chalked up a profit of 3 trillion won last year, and KB Financial and Woori Financial each reported some 2 trillion won in profit.

The banking sector has been criticized by the public for its massive profiting through high rates ranging from commission rates to loan interest rates. The difference between loan and deposit interest has widened from 2.68 percent in 2009 to 2.96 percent last year. Yonhap

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