By Lee Kyung-min
Thedifference between lending rate and deposit rate for Korean banks stood at 2.31 percentage points in 2018, the widest in five years, with expectation growing that their interest income will also be the highest.
Bank of Korea (BOK) data showed the banks' average lending rate was 3.71 percent in 2018, while the average deposit rate was 1.4 percent.
The margin, the widest since 2013 when it stood at 2.53 percentage points, came after the BOK raised the key interest rate by 25 basis points to 1.75 percent in November 2018.
The margin or spread refers to the difference between the rate it receives from loans and what it pays for deposits.
The widening spread came as the lenders have jacked up lending rates steeper than their deposit rates.
The banks' average lending rate rose by 0.36 percentage points in 2018 from 2016, while their deposit rate rose 0.24 percentage points.
Thanks to the widening net interest margin, banks' interest incomes in 2018 are expected to be the record-highest.
According to data from the Financial Supervisory Service (FSS), interest income of the banks nationwide was 29.9 trillion won ($26.5 billion) in the first nine months of 2018, the highest since 2008 when financial authorities began compiling the data.
Given the figure indicates the quarterly income was about 10 trillion won, the total interest income in 2018 is expected to surpass 40 trillion won, considering the banks' fourth-quarter income is expected to be just as handsome as the three previous quarters'.
KB Kookmin Bank posted a net interest income of 6.1 trillion won in 2018, up 9.6 percent from a year earlier.
KEB Hana Bank posted 5.2 trillion won in net interest income in the same period, up 10 percent from a year earlier.
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