Total Capital Ratio Rises to 15.34%
The Financial Supervisory Service announced on June 1 that South Korean banks’ total capital ratio increased 0.34 percentage point to 15.34 percent in the first quarter of this year. The common equity Tier 1 capital ratio and the Tier 1 capital ratio rose 0.4 percentage point and 0.47 percentage point to 12.85 percent and 13.93 percent, respectively.
“The banks’ capital increased based on net profit increase and capital increase and the increase more than offset an increase in their risk-weighted assets such as loan assets,” the organization explained, adding, “Their tangible common equity ratio rose 0.07 percentage point as the Tier 1 capital increased by 12.2 trillion won.”
Every South Korean bank met the regulatory requirements including capital buffer at the end of March. Hana Bank and DGB Daegu Bank reduced their risk-weighted assets to a large extent to achieve a substantial capital ratio improvement. On the other hand, the capital ratios of K Bank, BNK and Suhyup Bank fell due to an increase in loan assets. Kakao Bank, Citibank Korea, KB Kookmin Bank and Hana Bank posted 19.85 percent, 19.93 percent, 18.48 percent and 17.3 percent, respectively.
When it comes to financial holding companies with subsidiary banks, the BIS total capital ratio rose 0.53 percentage point to 15.16 percent. Hana reached 16.32 percent, followed by KB (16 percent), Shinhan (15.9 percent), Nonghyup (14.99 percent) and Woori (13.58 percent). As for regional financial holding companies, DGB showed the highest level of 14.97 percent, followed by JB (13.22 percent) and BNK (12.42 percent).