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Maintaining the policy rate at around 4% is seen as appropriate, according to an expert. Raising rates would increase the cost of capital and could erode corporate profits, while lowering rates could add pressure to the exchange rate and foreign capital flows. At the same time, risks from oil prices and inflation need close monitoring, because a sharp rise in inflation would make rate adjustments unavoidable. exchange rates today
Credit growth outpacing deposits has created a liquidity squeeze, prompting banks to raise deposits and, at times, push interbank rates higher. Fiscal dynamics—such as temporary cash withdrawals to the State Treasury—also contribute to liquidity tension.
From May–June 2026, rates may ease slightly as liquidity stabilizes, but the decline is unlikely to be large.
Non-performing loans (NPLs) remain a concern. While the NPL ratio is trending down, absolute NPL values are rising alongside loan growth. Liquidity pressure also makes NPL resolution more urgent, as distressed debts can limit banks’ ability to extend new lending.
Positive developments include ongoing legislative frameworks to handle bad debts, which can help banks manage collateral assets. However, the process takes time and must balance social welfare with proper valuation of distressed debt.
Overall, NPL risk remains—particularly in sensitive segments such as real estate. Even so, with policy support and bank efforts, the outlook for risk control is described as positive, though continued close monitoring is required.
Net interest margin (NIM) faces pressure. Banks are expanding non-interest income, while NIM is pressured by higher funding costs linked to liquidity stress. Loan yields are also shifting toward infrastructure projects with cheaper rates, rather than real estate and consumer lending.
Still, NIM may have bottomed and could recover gradually in the latter half of the year as rates ease. As credit growth slows, banks are pivoting to new drivers, including building a financial services ecosystem—securities, insurance, consumer finance, and asset management—along with expanding wealth management and promoting digital payments to grow CASA and fee income.
The banking sector is undergoing a structural shift toward international deposits, higher capital, development of a financial conglomerate model, and strengthening non-interest income. Cost control and digital transformation are highlighted as key priorities.
For bank stocks, valuations have returned to a five-year average, supporting a more reasonable stance, though they are not considered highly attractive in a rising rate environment. The sector’s long-term outlook is supported by high ROE and its central role in the economy.
In recent years, the growth driver has been leading banks building comprehensive financial ecosystems. These banks benefit from lending growth while also maintaining strong non-interest income, effective NPL resolution, and strong deposit mobilization. Additionally, some banks undergoing restructuring of “0-dong” banks may benefit from higher credit line allocations, supporting growth.
Investors should note that credit lending is currently prioritizing real estate projects with clear legal foundations. Caution is warranted for banks with heavy exposure to projects with incomplete legal status or higher risk.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
