No run on savings banks reported

The suspension of the operations of two savings banks didn’t cause any runs on the secondary banking sector on the first day after the announcement, Friday.

During morning operations hours, no mass withdrawals were reported at the savings banks.

Although it remains to be seen how many customers will react, some industry watchers take the calmer-than-expected response as a sign that the restructuring of the sector, burdened by the increasing number of toxic loans from soured construction project financing (PF), may be executed without any blowups on financial markets.

According to financial authorities, customers’ reactions to the two banks’ suspension was quite a contrast to what happened to Samhwa Savings Bank that was the first to be suspended one month ago.

A total of 146 billion won in deposits was withdrawn from affiliates of Busan Savings and Daejeon Mutual, the two suspended banks, and 16 other big secondary banks, on Thursday.

On the day when the much smaller Samhwa was suspended, about 274 billion won was withdrawn.

Out of the 19, six saw an increase in deposits.

Industry sources say that one savings bank saw withdrawals to the tune of 21 billion won on the day of the Samhwa suspension, but only 19 billion won was withdrawn Thursday.

Another saw about 2 billion won in withdrawals last month but this time, an influx of 14 billion won was paid into it.