Kyobo, DB, and Other Financial Conglomerates Improve 'Capital Adequacy Ratio'... Samsung and Hyundai Motor Decline

Overall Corporate Group Adequacy Ratio at Year-End Last Year Up 6.1%P from 2022
Kyobo Up 64.4%p, DB Up 52.8%p, Hanwha Up 23.4%p

As of the end of last year, the capital adequacy ratio of the entire financial conglomerates including Samsung, Hanwha, Kyobo, Mirae Asset, Hyundai Motor, DB, and Daou Kiwoom stood at 193.7%, marking an increase of 6.1 percentage points (P) compared to the previous year. However, the individual capital adequacy ratios of Samsung, Hyundai Motor, and Daou Kiwoom were reported to have declined compared to one year ago.

According to the Financial Supervisory Service on the 20th, these financial conglomerates saw their integrated own capital increase by 54.6 trillion KRW (45.1%) from 121.1 trillion KRW in 2022 to 175.7 trillion KRW. This is mainly attributed to the recognition of insurance contract margins (CSM) as available capital and the market valuation of insurance liabilities following the introduction of the new solvency regime (K-ICS) in the insurance sector.

The integrated required capital also rose by 26.1 trillion KRW (40.4%) from 64.6 trillion KRW in 2022 to 90.7 trillion KRW. This increase reflects the incorporation of new insurance risks such as longevity, lapse, expense, and catastrophe risks for insurance affiliates under K-ICS, as well as the rise in market risks including stock risk amounts.

By financial conglomerate, the capital adequacy ratios were highest in the order of Kyobo (238.9%), DB (218.7%), Samsung (210.5%), Daou Kiwoom (208.7%), Hanwha (172.2%), Mirae Asset (155.3%), and Hyundai Motor (154.6%). Compared to 2022, Kyobo increased by 64.4 percentage points, DB by 52.8 percentage points, Hanwha by 23.4 percentage points, and Mirae Asset by 8.5 percentage points, while Samsung, Hyundai Motor, and Daou Kiwoom decreased by 19.5 percentage points, 8.0 percentage points, and 12.5 percentage points respectively.

Jang Hangpil, team leader of the Financial Group Supervision Office at the Financial Supervisory Service, stated, "The capital adequacy ratios of the seven financial conglomerates generally indicate a sound loss absorption capacity. However, given the prolonged high interest rates and high exchange rates beyond initial expectations, it is necessary to prepare for uncertainties and increased volatility in the financial markets." He added, "We plan to closely monitor the capital adequacy trends of financial conglomerates in response to market changes and encourage strengthening of risk management against potential group risks such as contagion and concentration risks."

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