Corporations' excess funds hit record high in Q2 on robust chip exports

South Korean businesses amassed the highest level of excess funds in the second quarter, driven by a surge in semiconductor exports, according to central bank data released on Wednesday. The total net financial funds, calculated as financial assets minus liabilities, held by non-financial corporations reached 67.1 trillion won (US$50.1 billion) by the end of June, a significant increase from 20.8 trillion won three months prior, as reported by the Bank of Korea (BOK). This represented the maximum quarterly figure since the BOK began tracking the data in 2009.

Conversely, household net financial funds declined to 60.7 trillion won in the second quarter, down from 79.2 trillion won in the first quarter. This decrease was attributed to lower household incomes and an uptick in housing purchases. The total financial assets held by South Korean households and non-profit organizations increased to 6,930.2 trillion won by the end of June, up 513 trillion won from the previous quarter. However, household debts rose by 28.2 trillion won over the same period to 2,495.8 trillion won.

The ratio of financial assets to household liabilities stood at 2.78 percent, while the ratio of household debt to the Gross Domestic Product (GDP) was 81.1 percent as of the end of June, a slight decrease from 85.3 percent three months earlier.