Business holdings of excess funds hits record in Q1 on chip boom

Excess funds held by Korean businesses hit an all-time high in the first quarter as strong semiconductor exports boosted corporate earnings, central bank data showed Tuesday.

Net financial funds — the value of financial assets minus financial liabilities — held by nonfinancial corporations totaled 20.8 trillion won ($13.6 billion) at the end of March, up from 100 billion won three months earlier, according to data from the Bank of Korea (BOK).

It marked the highest quarterly figure since the BOK began compiling the data in 2009.

"Companies are mainly debtors as they usually borrow more money for investment and other business purposes than they earn," a BOK official said. "In the first quarter, however, their net profits surged due to semiconductor exports, resulting in excess funds."

Households' net financial funds rose to 79.2 trillion won in the first quarter from 67 trillion won three months earlier, partly due to end-of-year bonuses and a decrease in the supply of new apartments.

Financial assets held by the country's households and nonprofit organizations totaled 6.42 quadrillion won at the end of March, up 209.4 trillion won from three months earlier.

Their debts rose by 26 trillion won from three months earlier to 2.47 quadrillion won.

The ratio of financial assets to liabilities owned by households stood at 2.6.

Yonhap