South Korean banks are showing increasingly uneven household deposit-loan margins while also pushing mortgage spreads to record highs under tighter household lending controls. Data released by the Korea Federation of Banks on August 17 showed the five major commercial lenders — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — charged an average spread of 3.27% on new amortizing mortgage loans in June, the highest since the data series began in July 2019 and the seventh straight monthly increase from 2.99% in December and 3.05% in January. The average mortgage rate at those banks rose to 4.5% in June from 4.02% a year earlier, with most of the increase driven by a 0.33 percentage point widening in spreads rather than by the benchmark rate, which rose only 0.11 percentage points to 2.97%, while preferential discounts narrowed by 0.04 percentage points. Deposit-loan margins also remained uneven across lenders. Shinhan Bank posted the widest household deposit-lending spread among the five major banks at 1.57 percentage points in June, while regional lenders ranged from Jeonbuk Bank at 3.32 percentage points to iM Bank at 0.47 percentage points, a 2.85 percentage point gap. The average margin at the five major banks narrowed to 1.298 percentage points from 1.388 percentage points in May, while the average at KakaoBank, K Bank and Toss Bank widened to 2.22 percentage points from 2.16 percentage points. Markets are also watching the Bank of Korea's August 27 Monetary Policy Board meeting for a possible follow-up rate increase after last month's move to 2.75%, even as the Financial Services Commission on August 13 doubled this year's household loan growth target for the financial sector to 3% from 1.5%.