South Korean companies held over 20.8 trillion won in surplus funds in the first quarter, hitting a record high

Source: Global Market Report

Data released by the Bank of Korea on Tuesday showed that the excess funds held by Korean companies reached a record high in the first quarter of this year, as strong semiconductor exports boosted corporate profits.

According to data from the Bank of Korea, as of the end of March, the net financial assets held by non-financial enterprises—that is, the value of financial assets minus financial liabilities—reached 20.8 trillion won (about $13.6 billion), a substantial increase from 1 trillion won three months earlier.

This is the highest quarterly level since the Bank of Korea began compiling the data in 2009.

“Corporations are mainly net debtors because they usually borrow funds for investment and other business purposes, far exceeding their actual income,” said an official from the Bank of Korea. “However, in the first quarter, due to semiconductor exports, the net profits of companies increased significantly, resulting in a surplus of funds.”

In the first quarter, the net financial assets of Korean households increased from 67 trillion won three months earlier to 79.2 trillion won, partly due to year-end bonuses and a decrease in new apartment supply.

As of the end of March, the total financial assets held by Korean households and non-profit organizations amounted to 6417.1 trillion won, an increase of 209.4 trillion won from three months earlier.

Their debt rose from 2,600 trillion won three months earlier to 2,466.8 trillion won.

The ratio of financial assets to liabilities held by households was 2.6.