Retail deposits, or funds held by individual customers, are losing share at South Korea’s savings banks as lenders write off bad assets and reduce their balance sheets. At the end of June, retail deposits accounted for 66.67% of SBI Savings Bank’s total, equal to 6.84 trillion won ($4.9 billion), down 1.06 percentage points from a year earlier. The amount declined by 1.12 trillion won, while corporate and institutional deposits rose to 7.43% from 4.92%. OK Savings Bank’s retail-deposit share fell to 66.42%, with the balance dropping by 918.2 billion won. The share also declined at Korea Investment Savings Bank, Acuon Savings Bank, Daol Savings Bank, Shinhan, DB and Hana Savings Bank. Welcome Savings Bank was higher than a year earlier but remained below its June 2024 level, while Chinae Savings Bank posted an 11.35-percentage-point increase. The market attributes the shift to the cleanup of bad real estate project-financing loans, which reduces liabilities and causes retail funding to fall faster than other sources. Savings banks are also facing weak loan demand, slowing regional economies, lending curbs and limited lending opportunities. Their average one-year deposit rate was 3.73% as of the 16th, below 3.81% at the end of July, narrowing the advantage over commercial banks. Industry officials say shrinking deposits is rational when lenders have little use for incoming funds, but warn that losing individual customers could make future expansion more expensive and weaken the banks’ core business model.