Bank of Korea says corporate surplus hit record as chip profits surged

The Bank of Korea said Wednesday that South Korean nonfinancial companies ran a net financial surplus of 67.1 trillion won ($49.9 billion) in the second quarter, the largest quarterly figure since the central bank began compiling the data in 2009.

The bank attributed the surge to sharply higher net income at semiconductor makers including Samsung Electronics and SK hynix. The corporate surplus more than tripled from 20.8 trillion won in the first quarter, as companies deployed 267 trillion won, up from 137 trillion won three months earlier, with deposits at financial institutions and trade credit leading the expansion. Funding rose to 200 trillion won from 116 trillion won, as bond issuance and other direct financing grew.

Kim Yong-hyun, who heads the Bank of Korea's flow-of-funds team, said listed companies' net income climbed to 189 trillion won in the second quarter from 111 trillion won in the first, with the increase concentrated in semiconductor companies.

Households and nonprofit organizations ran a net surplus of 60.7 trillion won, down 18.5 trillion won from 79.2 trillion won in the previous quarter. The bank attributed the decline to lower household income and higher net home purchases, which absorb cash that would otherwise be saved.

Kim said households pulled 33.6 trillion won out of short-term savings deposits at deposit-taking institutions and 5.4 trillion won out of long-term savings deposits, while holdings of resident-issued shares and investment fund stakes both reached record highs. "The money movement trend was clearly visible in the second quarter," he said.

Kim said household debt rose just 1.1 percent while nominal GDP grew 6.2 percent, and that the debt ratio is likely to keep falling given the semiconductor cycle and the pace of GDP growth.