Banks secretly smiling… Interest rates hiked again amid controversy over ‘money party’

It was revealed that banks, which continued to record record-high performance as high interest rates continued, paid huge amounts of special severance pay to voluntary retirees. Meanwhile, commercial banks have recently begun raising interest rates again in the name of suppressing the increase in household loans, raising criticism that they are only busy with the ‘interest business’.

According to data submitted by the Financial Supervisory Service by Rep. Chun Jun-ho of the Democratic Party of Korea, a member of the National Assembly’s Political Affairs Committee, on the 9th, 14 domestic banks paid a total of 6.5422 trillion won in voluntary retirement benefits to voluntary retirees from 2019 to August of this year.

During this period, a total of 16,236 employees took voluntary retirement from 14 banks, and each person received an average of over 400 million won in voluntary retirement benefits. In particular, 13 banks excluding Hana Bank have not yet implemented voluntary retirement this year, so in fact, this data can be viewed as five years of statistics.

Voluntary retirement allowance is money paid by banks in addition to statutory retirement allowance. This included special severance pay, children’s school expenses, and re-employment support, and some banks also supported health checkup costs, medical expenses, and gift certificates. The analysis is that banks, whose profits have increased due to the prolonged high interest rates after COVID-19, distributed high levels of voluntary severance pay to their employees.

Commercial banks have been continuously raising interest rates recently. Although it is said to be a measure to prevent the increase in household loans, some point out that banks are only focused on ‘feeding their bellies’ amid the economic downturn. In particular, the U.S. Federal Reserve implemented the so-called ‘Big Cut’, which drastically reduced the base interest rate for the first time in four and a half years, but banks are actually going against this trend.

According to the financial industry, the fixed (mixed/cyclical) interest rates on home mortgage loans of the five major commercial banks, including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup, are 3.64-6.15% per annum as of September 30, and the variable interest rates are 4.50-6.69 per annum. %all.

Starting on the 4th, Kookmin Bank raised the interest rate on variable and mixed mortgage loans by 0.20% points and the interest rate on jeonse loan loans by 0.15-0.25% points. The credit loan interest rate (overall credit rating) was raised by 0.20% point.

On the same day, Shinhan Bank also raised the interest rates on home loans and jeonse loans by up to 0.20% points and 0.45% points, respectively. Nonghyup Bank actually had the effect of raising interest rates by reducing the size of the preferential interest rate.

Earlier this month, Hana Bank also raised the interest rate on jeonse loans by 0.20% point (non-face-to-face) and 0.50% points (face-to-face), and Woori Bank also raised the interest rate on home loans by 0.1-0.2% points and the interest rate on jeonse loans by 0.2% points. there is.

As banks continue to raise lending interest rates, this year’s performance is expected to increase significantly. According to financial information company FN Guide, the four major banks, including KB, Shinhan, Hana, and Woori Financial Group, are expected to reap net profits of over 4.7 trillion won in the third quarter of this year alone. As lending interest rates continue to rise despite falling market interest rates, the controversy over the banking sector’s ‘interest business’ is expected to continue.

Reporter Lee Jin-woo realstone@segye.com

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