Local banks` funding rises 16.2 pct this year

SEOUL, Dec. 21 (Yonhap) -- South Korean banks' local currency-denominated funding rose 16.2 percent in the January-November period from the end of last year on rising deposits and short-term borrowing, the financial watchdog said Sunday.
As of the end of November, commercial lenders' won-denominated funding reached
1,131.3 trillion won (US$877 billion), up 157.9 trillion won from the end of
2007, according to the Financial Supervisory Services (FSS). Won-denominated
funding covers deposits and short-term borrowing like sales of certificates of
deposit (CDs) and bank bonds.
Bank's funding inched up only slightly, however, rising by 6.9 trillion won in
November, sharply down from a 31 trillion won gain the previous month amid a
deepening economic downturn, the FSS said.
The ratio of loans to deposits for commercial banks came in at 101.1 percent as
of end-November, down from 101.3 percent the previous month, it added. The ratio
has been on the downward trend since it hit a yearly high of 105.4 percent as of
the end of July.
South Korean lenders have been suffering from cash shortages as they have faced
trouble in rolling over debt or raising funds amid the global financial turmoil.
"The watchdog plans to advise local banks to diversify their funding sources
beyond short-term borrowing," the watchdog said. "It will also take steps to
ensure that improvements of funding structures does not lead to a contracting
liquidity supply for the real economy."
sooyeon@yna.co.kr
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