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"Bank On It: Keep the Vultures Tied Down" ⚠️ Translated from the JoongAng Ilbo using generative AI and tidied up by our crew. Chapters* subtitles off, selected* captions settings, opens captions settings dialog* subtitles off, selected* audio_0* audio_1, selected* audio_2
Figuring out how to get your mitts on some extra cash in Seoul ain't a walk in the park, folks. But alas, here we are in early May 2025, witnessing some serious shifts in our beloved banks, Shinhan and Hana, in the city of skyscrapers, palaces, and personal finance misery.
The Hefty Rates of Shinhan and Hana
Right now, Shinhan and Hana are saddling up the rate differences, making it tough for the little guy to keep up. Here's what's shaking in their banks' lending and saving departments:
Shinhan Bank
- Deposit Rates: Shinhan's low-end deposit product rates dropped to around 2.15% [MG4] as of May 2.
- Lending Rates: Shinhan's mortgage rates fluctuate within the average range for major banks in Korea - approximately 4.07% to 5.59% [MG7]. However, the most recent reports don't specify Shinhan's mortgage rates. The bank is currently hovering over a record-breaking spread of 1.51 percentage points [MG1][MG3].
Hana Bank
- Deposit Rates: Deposit rates are slightly higher than Shinhan's, hovering around 2.40% [MG4] for similar products. Hana offers a one-month term deposit at a rate of 2% [MG8].
- Lending Rates: Similar to other major banks, Hana's variable mortgage rates hover within the same range - roughly 4.07% to 5.59% [MG8]. The bank's fixed mortgage rates range between 3.35% to 5.08% [MG8]. Hana's spread clocks in at 1.43 percentage points, also a record-breaking figure since mid-2022 [MG1][MG3].
Historical Comparison
Since mid-2022, Shinhan and Hana have reported record-breaking spreads at 1.51 percentage points and 1.43 percentage points [MG1][MG3], respectively. The Bank of Korea has been attempting to lower interest rates, but commercial banks have been dragging their feet on reducing loan rates, resulting in fatter wallets for the banking industry at the expense of consumers [MG1][MG9].
- Amidst the volatility in the economy and US tariff discussions, the Bank of Korea decided to lower interest rates, with the key rate cut to 2.75%.
- Despite the Bank of Korea's attempts to lower interest rates, commercial banks like Shinhan and Hana have been slow to reduce loan rates, leading to increased profits for the banking industry.
- On a spikes day in Seoul, the eye-popping rate differences between Shinhan and Hana's deposit and lending products are making it difficult for consumers to keep up.
- In the city of Seoul, figuring out how to get extra cash isn't easy, especially with the hefty rates offered by Shinhan and Hana.
- The arts and cultural industry of Seoul may also be affected by these rate differences, as they rely on easy access to financing from banks.
- The government of South Korea should consider implementing policies to increase competition in the banking-and-insurance industry to reduce these wide rate differences.
- The Fed, like the Bank of Korea, may also want to examine the implications of high rate differences on consumers and the economy, and take its sweet time with the next rate shift if necessary.
