Savings banks, securities investments surge by 40%... shifting strategies due to changes in loan restrictions

Savings banks, in order to expand investment returns, are increasingly venturing into securities such as stocks and bonds. Related cases have surged sharply, leading to an overall holding scale this year that has grown over 40% compared to the end of last year. This is due to the deterioration of the traditional lending-focused business environment and changes in asset management methods.

According to data from the Savings Bank Central Association and Korea Credit Ratings on the 21st, as of the end of September 2025, the securities balances of 79 savings banks nationwide reached 12.5 trillion KRW. Compared to the 8.9 trillion KRW at the end of last year, this represents a 40.5% increase. In contrast to the trend of approximately 10% annual growth in securities balances over the past few years, the increase is very steep. Notably, among the top ten banks, Accuon Savings Bank’s balance surged from 1.986 trillion KRW to 9.975 trillion KRW during the same period, an increase of over 400%; Shinhan Savings Bank and Welcome Savings Bank also grew by over 90% and 60%, respectively.

Behind this phenomenon, there are factors such as government loan restrictions leading to reduced sources of income. The real estate policy announced on June 27 significantly cut household credit loan limits, and loans to real estate developers (PF loans) have become difficult due to declining collateral values and delayed sales. Under the constraints of traditional income sources—interest income—savings banks have turned to investing savings funds in securities to seek returns.

Additionally, the surge in the Korean stock market, which first broke through the KOSPI index of 4,000 points in 2025, has also played a role. As the stock market continues to prosper, banks are increasing their investment proportions in stocks and risk assets. These assets can offer relatively higher expected returns compared to safe assets like government bonds, and some of these investments are made through corporate funds.

Another major reason is the normalization funds for real estate PF projects in which savings banks participate. After transferring loan claims to these funds, savings banks participate in the form of capital contributions. During this process, some assets are recognized as securities on the books. Korea Credit Ratings estimates that about 20% of the total securities held by savings banks—approximately 2.6 trillion KRW—are assets related to these funds.

However, while the expansion of securities brings the positive aspect of diversified income, it also exposes financial institutions to greater market volatility risks. Particularly, the higher the proportion of risk assets, the greater the potential for losses caused by interest rate changes, stock price declines, and other factors. In fact, most PF funds primarily invest in local or pre-completion bridge loans, which are highly susceptible to turning into losses during economic downturns, creating significant psychological burdens.

This trend is likely to continue in the future. With loan restrictions temporarily maintained, financial institutions are expected to continue seeking returns through asset management. However, if risk management does not keep pace with the increased proportion of high-risk investments, it could impact the overall stability of savings banks and warrants attention.