Bank funds rush to stocks amid market rally

Jan 21, 2026, 07:48 am

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The headquarters of South Korea’s five major commercial banks—KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH NongHyup Bank—are seen in Seoul. / Courtesy of each bank

Funds are rapidly flowing out of banks and into the stock market amid a blistering rally, raising concerns that the so-called “money move” could accelerate further.

Deposits at South Korea’s five major commercial banks fell by about 35 trillion won, while investor deposits used for stock purchases jumped by roughly 15 trillion won, according to financial industry data released on Jan. 20. Even fixed deposits edged down slightly as savers turned to alternative products such as integrated management accounts (IMA).

The five banks—KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH NongHyup Bank—saw combined demand deposit balances (MMDA) drop to 673.9 trillion won, down nearly 5 percent from the end of last month. Fixed deposits also slipped by more than 1 trillion won in December.

Financial authorities attribute the shift largely to the strong performance of the KOSPI. Investor deposits tend to rise in tandem with market gains, and recent data show a close correlation between the benchmark index’s rally and the increase in funds parked for stock trading. Investor deposits climbed from about 77.9 trillion won in late November to over 91.2 trillion won by Jan. 16, while balances in cash management accounts (CMA) also rose steadily.

Banks responded in the second half of last year by reviving fixed deposit products offering rates in the 3 percent range. However, analysts say they are losing ground to newer alternatives such as IMA products launched in December, which guarantee principal if held to maturity while targeting returns of over 4 percent. More than 2.2 trillion won flowed into IMA products on their first day alone.

A banking industry official said the return of higher-yield deposit products reflects banks’ awareness of the money move trend, adding that while the decline in fixed deposits remains modest for now, the sector is closely monitoring whether the outflow toward equities will continue.

#bank deposits #money move #KOSPI rally #investor deposits #CMA