Slight Decline in Bank Capital Ratios at End of March... "Stable Compared to Regulatory Ratios"

[Asia Economy Reporter Kim Hyo-jin] At the end of March, the capital ratios of domestic banks were found to have declined compared to the end of last year.

According to the Financial Supervisory Service on the 8th, the total capital ratio of domestic banks based on the Bank for International Settlements (BIS) at the end of March was 14.72%, down 0.54 percentage points from the end of last year.

The Tier 1 capital ratio (12.80%) and common equity tier 1 capital ratio (12.16%) also decreased by 0.41 percentage points and 0.40 percentage points respectively compared to the end of last year.

This was the result of the risk-weighted asset growth rate (4.7%) significantly exceeding the capital growth rate (1.0% based on total capital) during the first quarter.

However, the Financial Supervisory Service explained that this is still a stable level, about 3 to 4 percentage points higher than the regulatory ratios.

The regulatory ratios are 10.5% for total capital, 8.5% for Tier 1 capital, and 7.0% for common equity tier 1 capital.

Major banks including Hana (15.62%), Shinhan (15.54%), KB Kookmin (15.01%), NH Nonghyup (14.80%), and Woori (14.77%) generally maintained total capital ratios around 14 to 15%.

Internet-only bank K Bank (11.14), KDB Industrial Bank (13.33%), and Sh Suhyup Bank (13.69%) had relatively lower ratios.

Capital ratios of holding companies with banks as subsidiaries also declined slightly.

As of the end of March, the total capital ratio of bank holding companies based on BIS was 13.40%, down 0.14 percentage points from the end of last year.

The Tier 1 capital ratio (11.97%) and common equity tier 1 capital ratio (10.95%) also fell by 0.13 percentage points and 0.15 percentage points respectively.

This was influenced by the risk-weighted asset growth rate (3.7%) exceeding the capital growth rate (2.7%) during the first quarter.

Shinhan (14.06%), KB Financial Group (14.02%), Hana (13.80%), and NH Nonghyup Financial Group (13.80%) maintained stable levels around 13 to 14%.

Woori (11.79%), DGB (12.06%), JB (12.95%), and BNK (12.98%) Financial Groups had relatively lower total capital ratios.

A Financial Supervisory Service official evaluated, "Although the loan growth trend due to the novel coronavirus infection (COVID-19) continues, most banks and holding companies have capital buffers above the regulatory ratios."

This content was produced with the assistance of AI translation services.