Bank funding slows in South Korea

Low interest margins putting a brake on growth.

The Financial Supervisory Service revealed that funding growth by South Korean banks slowed in the first half as low interest margins drove local lenders to refrain from attracting deposits.

FSS said won-denominated financing by banks, including deposits and wholesale funding, stood at 1,277.8 trillion won (US$1.1 trillion) in June, up 25.6 trillion won year-on-year.

The rise was lower than an increase of 27.1 trillion won in the first half of 2012. Bank deposits, including demand deposits and savings deposits, grew 18.1 trillion won.