Driven by a strong performance in the semiconductor sector, corporate profits surged in the first quarter of this year, leading to a record-high net financial surplus for non-financial corporations since the relevant statistics began.

Meanwhile, households showed a trend of moving funds from bank deposits into stock investments, a phenomenon known as a money move, while the ratio of household debt to gross domestic product (GDP) fell to the 85% range.

According to the Flow of Funds (provisional) statistics for the first quarter of 2026 released by the Bank of Korea on July 7, the net financial surplus of the domestic sector reached 84.3 trillion won, a significant increase from 51.9 trillion won in the fourth quarter of last year.

Net financial surplus is calculated by subtracting financial liabilities (fundraising) from financial assets (fund management).

Among these, the net financial surplus of non-financial corporations reached an all-time high due to a sharp rise in corporate net profits.

The net financial surplus for non-financial corporations stood at 20.8 trillion won, a substantial increase from 100 billion won in the fourth quarter of last year.

This is the largest scale since the statistics were first compiled in 2009.

The previous record was 5.8 trillion won in the first quarter of 2024.

The semiconductor boom in the first quarter led to a surge in corporate net profits, resulting in a large amount of surplus funds.

Kim Yong-hyun, head of the Flow of Funds Team at the Bank of Korea, explained, "As non-financial corporations are the main agents of production that typically invest in facilities and technology to produce goods and services, they are generally entities with a fund deficit where real investment exceeds financial investment. However, this quarter, a significant amount of surplus funds was generated in non-financial corporations due to a sharp rise in operating profits from the semiconductor boom."

Fund management by non-financial corporations, centered on trade credit and direct investment, grew from 58.4 trillion won in the fourth quarter of last year to 137 trillion won in the first quarter of this year.

Fundraising also increased from 58.3 trillion won to 116.2 trillion won, primarily through borrowing from financial institutions and trade credit.

The net financial surplus of households (including sole proprietors) and non-profit organizations also expanded from 67 trillion won in the fourth quarter of last year to 79.2 trillion won in the first quarter of this year.

This was influenced by an increase in income due to year-end bonuses and a decrease in new apartment move-ins, which led to an increase in surplus funds.

Typically, households act as suppliers of funds to corporations and the government—which generally have a net fund deficit—by using their surplus funds through deposits or investments.

Excluding fundraising, the scale of fund management by households in the first quarter was 96.3 trillion won, up from 84.3 trillion won in the previous quarter.

In particular, the management of equity securities and investment funds increased significantly from 34 trillion won to 61.4 trillion won, and deposits in financial institutions also rose from 12.8 trillion won to 29.4 trillion won.

A significant portion of the increase in deposits at financial institutions was attributed to the expansion of securities deposits.

Kim explained, "While bank deposits decreased significantly, stock deposits increased, indicating a money move toward stocks."

The total funds raised by households in the first quarter amounted to 17.1 trillion won, a slight decrease from 17.3 trillion won in the fourth quarter of last year.

This was largely due to a decline in borrowing from financial institutions, which fell from 18 trillion won to 16 trillion won.

At the end of the first quarter, the ratio of household debt to nominal GDP was 85.3%, down 2.9 percentage points (p) from 88.1% in the fourth quarter of last year.

Kim explained, "Household debt increased by about 0.6% this quarter due to the government's household loan regulations and banks' strengthened management of household loans. Since the nominal GDP growth rate in the first quarter of this year was about 4% compared to the previous quarter, the household debt ratio fell significantly."

He added, "The government has announced that it will manage the household debt ratio to 80% or below. If household debt is managed to a significant extent and this year's (nominal) GDP growth rate reaches over 10%, the household debt ratio could fall quite a bit."

The net fund-raising scale of the general government expanded from 19 trillion won to 23.3 trillion won as government spending exceeded revenue due to the rapid execution of the budget.

The net fund-raising scale of the external sector reached 84.3 trillion won, influenced by the expansion of the current account surplus.

This is the highest level since the statistics were first compiled in 2009, with the previous record being 53.3 trillion won in the third quarter of last year.

Kim explained, "The net fundraising scale of the external sector was also affected by the increase in the balance of payments due to rising exports, and a significant portion appears to be due to an increase in semiconductor exports."