In order to expand investment returns, savings banks have been reaching out to stocks, bonds, and other securities, leading to a sharp increase in related cases, causing the overall holding scale to grow by more than 40% compared to the end of last year. This is due to the deterioration of the traditional operating environment dominated by loans and a change in asset operation methods.
According to data from the Central Association of Savings Banks and Korea Credit Ratings on the 21st, as of the end of September 2025, the balance of securities of the 79 savings banks nationwide reached 12.5 trillion won. This is an increase of 40.5% compared to the balance of 8.9 trillion won at the end of last year, which has seen a very steep increase compared to the trend of about 10% annual growth in recent years. Notably, among the top ten banks, Accuon Savings Bank's balance surged from 198.6 billion won to 997.5 billion won during the same period, an increase of over 400%; Shinhan Savings Bank and Welcome Savings Bank also grew by more than 90% and over 60%, respectively.
Behind this phenomenon, there are factors such as government loan controls leading to a reduction in sources of income. The real estate policy announced on June 27 this year significantly reduced the credit loan limits for households, while PF loans aimed at real estate developers have also become difficult due to declining collateral values and delays in sales. In the situation where the traditional source of income—interest income—is limited, savings banks invest their savings in securities to seek returns.
In addition, since 2025, the South Korean stock market has first broken through the 4000-point mark of the KOSPI index, and the surge in the stock market has also had an impact. With the ongoing prosperity of the stock market, banks are increasing their investment in stocks and risky assets, which can bring relatively higher expected returns compared to safe assets like government bonds, some of which are made through corporate funds.
Additionally, the normalization fund for real estate PF, in which savings banks participate, is also one of the main reasons. After transferring loan claims to this fund, savings banks participate in the form of contributions, during which some assets are recognized in accounting as securities. South Korea's credit rating estimates that about 20% of the total securities held by savings banks, amounting to approximately 2.6 trillion won, are assets related to this fund.
However, the expansion of these securities, while bringing the positive aspect of diversification of returns, also comes with greater exposure of financial institutions to market volatility risks. In particular, the higher the proportion of investments in risky assets, the greater the likelihood of losses due to interest rate changes, stock price declines, etc. In fact, most PF funds target local or bridge loans that are in the pre-completion stage, making them prone to losses during economic downturns, leading to significant psychological burdens.
This trend is likely to continue in the future. With loan controls temporarily maintained, it is expected that financial institutions will continue to seek returns in asset management. However, if there is no simultaneous strengthening of risk management regarding the increased proportion of high-risk investments, it may affect the overall stability of savings banks and needs to be noted.
