ID :
208250
Tue, 09/20/2011 - 11:19
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Shortlink :
https://oananews.org//node/208250
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Deposit withdrawals at savings banks on decline: officials
SEOUL, Sept. 20 (Yonhap) -- South Korea's financial watchdog said Tuesday that the amount of panic withdrawals at local savings banks are falling off as account holders are calming down two days after the government suspended seven ailing savings banks.
"The total amount of cash withdrawn at 92 local savings banks stood at around 90 billion won (US$78 million) as of noon or about 30 percent less than what was withdrawn on Monday. The atmosphere at the suspended savings banks' branches also seems to be cooling down," Joo Jae-seong, a senior deputy governor at the Financial Supervisory Service (FSS), said in a press briefing.
The Financial Services Commission, the country's financial watchdog, on Sunday suspended seven savings banks saddled with heavy debts and insufficient capital adequacy ratios as part of its efforts to restructure the ailing sector.
The average 30-day delinquency ratio of local savings banks stood at 11.79 percent as of the end of June, compared with the industry average of 3.16 percent, according to industry data.
The government's move affected around 640,000 customers and deposits worth 11.3 trillion won, sparking fears of massive withdrawals that could have become a bank run and cause further damage to the ailing sector.
On Monday, customers rushed to savings banks around the country to retrieve their holdings and check on the latest developments. In a bid to alleviate worries, top financial officials visited normally-operating savings banks to open accounts and prove their stability.
The FSS official, however, said savings banks are now mostly in "normal" operating conditions and the number of visiting customers is dropping.
Market watchers also forecast that the Sunday suspensions are likely to have a limited impact on the local financial system, citing the affected banks' relatively small size and potential government aid measures.
"The problems that Korea's mutual savings banks face are unlikely to evolve into systematic risks for the banking system because the banks are relatively small. In terms of assets and equities, the savings bank sector accounts for roughly 5% of the national banking system," Standard & Poor's said in a report.
Meanwhile, the government said it plans to pump public funds to bolster viable savings banks who wish to receive financial support. The state-run Korea Finance Corp. is scheduled to complete the process by December.
Financial regulators have also opened a help center to advise savings bank customers. Deposits up to 50 million won are fully guaranteed by the government.
"The total amount of cash withdrawn at 92 local savings banks stood at around 90 billion won (US$78 million) as of noon or about 30 percent less than what was withdrawn on Monday. The atmosphere at the suspended savings banks' branches also seems to be cooling down," Joo Jae-seong, a senior deputy governor at the Financial Supervisory Service (FSS), said in a press briefing.
The Financial Services Commission, the country's financial watchdog, on Sunday suspended seven savings banks saddled with heavy debts and insufficient capital adequacy ratios as part of its efforts to restructure the ailing sector.
The average 30-day delinquency ratio of local savings banks stood at 11.79 percent as of the end of June, compared with the industry average of 3.16 percent, according to industry data.
The government's move affected around 640,000 customers and deposits worth 11.3 trillion won, sparking fears of massive withdrawals that could have become a bank run and cause further damage to the ailing sector.
On Monday, customers rushed to savings banks around the country to retrieve their holdings and check on the latest developments. In a bid to alleviate worries, top financial officials visited normally-operating savings banks to open accounts and prove their stability.
The FSS official, however, said savings banks are now mostly in "normal" operating conditions and the number of visiting customers is dropping.
Market watchers also forecast that the Sunday suspensions are likely to have a limited impact on the local financial system, citing the affected banks' relatively small size and potential government aid measures.
"The problems that Korea's mutual savings banks face are unlikely to evolve into systematic risks for the banking system because the banks are relatively small. In terms of assets and equities, the savings bank sector accounts for roughly 5% of the national banking system," Standard & Poor's said in a report.
Meanwhile, the government said it plans to pump public funds to bolster viable savings banks who wish to receive financial support. The state-run Korea Finance Corp. is scheduled to complete the process by December.
Financial regulators have also opened a help center to advise savings bank customers. Deposits up to 50 million won are fully guaranteed by the government.
