Banks Cut Preferential Rates Instead of Spreads in 'Tricky Maneuver'

[Anchor]

Some commercial banks have reportedly raised the interest burden on actual borrowers by stealthily reducing preferential rates while claiming to lower loan rates. Even though the government changed the law to prevent banks from passing costs they should bear onto borrowers, banks have resorted to such tricks.

Reporter Kim Gi-tae has the details.

[Reporter]

As mortgage rates at commercial banks have soared to the late 6 percent range per annum, borrowers are now facing fear.

[Cho Gyeong-ho / Yangcheon-gu, Seoul: Almost everyone has debt. Already... with debt, bank interest rates are going up, and as a result, everyone's livelihood is becoming difficult.]

Bank loan interest is determined by adding the spread to the benchmark rate and then subtracting the preferential rate.

To put it a bit more simply, the benchmark rate is the basic funding cost for the money the banks procured, and the margin and spread are added on top of that.

Then, a structure is set up where preferential rates are deducted for customers who do things that help the bank, such as salary transfers or credit card usage.

However, last July, the law was changed so that banks could no longer arbitrarily attach spreads and margins.

The message was not to pass the costs that banks should shoulder onto borrowers.

And then, some banks began using this kind of method.

Let us take a look at KB Kookmin Bank.

As per the law, it lowered the spread by 0.08 percentage points while simultaneously slashing the preferential rate, which gives benefits to customers, by 0.31 percentage points.

NH Nonghyup also lowered its spread by 0.26 percentage points while cutting its preferential rate by more than half, by 0.61 percentage points.

Let us assume that Manager Kim in his 50s working at a large corporation bought an apartment in August of this year using a mortgage loan of 600 million won from NH Nonghyup, so-called "young-geul" (borrowing to the absolute limit).

Instead of the interest decreasing as a result of the law change, he ended up bearing an additional 175,000 won in interest per month, amounting to 2.1 million won more for a year.

[Choi Jae-won / Professor, Department of Economics, Seoul National University: Banks need to disclose more transparently how spreads and preferential rates are determined. Isn't it true that banks are in a position of superiority? Therefore, they need to have some social responsibility...]

The banks explained that "there was no intention to engage in interest-based business."

However, given that domestic banks earned a record high of 32.2 trillion won in interest in the first half of this year, this explanation leaves a bitter aftertaste.

(Video Editing: Kim Jin-won, Design: Lee Jong-jung, Lee Ga-jin, VJ: Jeong Han-uk)
※ Please note: This article was translated by AI and may contain errors.