Corporate profits surged due to the semiconductor boom, pushing the net cash management of companies in the second quarter of this year to over 67 trillion won, a record high. Households, anticipating a strong stock market, have noticeably shifted their funds from bank deposits to domestic stocks and mutual funds in a trend known as 'money move.'
According to the Bank of Korea's preliminary statistics on the '2026 Q2 Financial Circulation' released on October 7, the net cash management in the domestic sector resulting from economic activities reached 147.8 trillion won, an increase of 63.5 trillion won from the previous quarter's 84.3 trillion won.
By sector, non-financial corporations saw their net cash management rise significantly from an increase of 20.8 trillion won in the previous quarter to 67.1 trillion won. This marks the highest level since statistics began in 2009, breaking the record set just one quarter earlier.
Net cash management is calculated by subtracting the amount of financial liabilities from the amount of financial assets, indicating the increase in available funds for economic entities.
Corporate cash management expanded dramatically from 137 trillion won in the first quarter to 267.1 trillion won in the second quarter, driven primarily by increases in deposits at financial institutions and trade credit. Fundraising also rose by 83.8 trillion won to 200 trillion won, mainly through bond issuance and trade credit.
Kim Yong-hyun, head of the Bank of Korea's Financial Circulation Team, stated, "In the second quarter, the semiconductor market improved, leading to a significant increase in net profits for listed companies from 112 trillion won in the first quarter to 181 trillion won. The operating and net profits of semiconductor firms like Samsung Electronics and SK Hynix contributed significantly to this growth."
For households and non-profit organizations, net cash management decreased from 79.2 trillion won in the previous quarter to 60.7 trillion won due to declining household income and increased net housing acquisitions. Cash management fell from 96.3 trillion won to 88.5 trillion won, while fundraising rose from 17.1 trillion won to 27.8 trillion won, primarily through borrowing from financial institutions.
Household funds shifted from deposits to stocks and mutual funds. The management of equity securities and investment funds surged from 61.4 trillion won in the previous quarter to 101.6 trillion won. Among these, resident-issued stocks and equity stakes amounted to 67.2 trillion won, and investment fund shares reached 35.6 trillion won, both marking record highs. In contrast, deposits at financial institutions reversed from an increase of 29.4 trillion won in the previous quarter to a decrease of 23.3 trillion won.
Kim noted, "About 39 trillion won left short- and long-term savings deposits, while deposits at securities firms increased by 20.2 trillion won. This indicates a significant rise in funds for stock purchases and a substantial decrease in savings at deposit-taking institutions, reflecting the money move trend among households in the second quarter."
The net cash inflow from the external sector expanded from 84.3 trillion won in the previous quarter to 147.8 trillion won, driven by an increase in the current account surplus, marking the largest figure since the statistics began. The increase in external sector cash management indicates a rise in South Korea's external debt, while the increase in fundraising reflects a growth in external assets.
At the end of the second quarter, the financial assets of households and non-profit organizations totaled 6930.2 trillion won, an increase of 513.2 trillion won from the previous quarter, while financial liabilities rose by 28.2 trillion won to 2495 trillion won. Net financial assets expanded by 484.9 trillion won to 4435.2 trillion won. The debt-to-financial asset ratio rose to 2.78 times, up from 2.60 times at the end of the previous quarter.
The ratio of household debt to nominal GDP stood at 81.1%, down 4.2 percentage points from the previous quarter's 85.3%, marking the largest decline since the statistics began in 2009. This decline is attributed to a 6.2% increase in nominal GDP, while the growth rate of household debt was limited to 1.1%. The government has set a goal to reduce the household debt-to-GDP ratio to around 80% by 2030.
Kim stated, "The semiconductor boom is expected to continue into the third quarter, suggesting that the decline in the household debt ratio will persist. As GDP grows rapidly, the government's target could be achieved much sooner. There is even a possibility that it could fall below 80% within this year."
* This article has been translated by AI.
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