[Edaily Reporter Shin Ha-yeon ] Bank stocks are rallying across the board as the COFIX (Cost of Funds Index)—which serves as the benchmark for variable-rate mortgage loans in the banking sector—has risen for three consecutive months, reaching the 3% range for the first time in one year and five months.
According to MP Doctor on the 16th, as of 9:26 a.m. that day, #Kbank was trading at 6,490 won, up 12.87% from the previous trading day.
At the same time, Jeju Bank(006220)(3.61%), ShinhanFinancialGroup Co.,Ltd.(055550)(3.36%), INDUSTRIALBANKOFKOREA(024110)(3.29%), HanaFinancialGroupInc.(086790)(3.22%), KB Financial Group(105560)(2.20%), KakaoBank Corp.(323410)(1.99%), and WooriFinancialGroup(316140)(1.92%) are all rising in tandem.
This stands in contrast to the KOSPI, which is trading at 6,905.95, down 378.46 points (5.20%).
This is interpreted as the market reflecting expectations that rising KOPIS rates—which are driving up lending rates such as those on variable-rate mortgages—could improve banks’ interest income and net interest margin (NIM). While KOPIS is an indicator that reflects banks’ funding costs, if the increase in lending rates exceeds the rise in funding costs (such as deposit rates), the spread between deposit and lending rates widens, which can have a positive impact on profitability.
On the 15th, the Korea Federation of Banks announced that the COFIX rate, based on new loan volume in June, stood at 3.05%, up 0.15 percentage points from May’s annual rate of 2.90%.
This marks the first time the COPIX rate based on new loan volume has reached the 3% range in one year and five months, since it stood at 3.08% in January of last year. The COPIX rate has risen for three consecutive months since April. The COPIX rate based on outstanding balances also rose by 0.05 percentage points, from 2.89% to 2.94% annually.
The COFIX is the weighted average interest rate on funds raised by eight domestic banks and reflects fluctuations in the interest rates of deposit products—such as savings and time deposits—and bank bonds actually handled by the banks.