Domestic Banks' Q2 'BIS Capital Ratio' at 15.76%... Up 0.13%P

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The BIS-based capital ratios of domestic banks rose as of the end of the second quarter of this year, maintaining a sound level.

According to the Financial Supervisory Service on the 28th, the total capital ratio based on BIS of 17 domestic banks, including 8 bank holding companies (Shinhan, Hana, KB, Woori, Nonghyup, DGB, BNK, JB) and 9 non-holding banks (SC, Citi, Industrial, Corporate, Export-Import, Suhyup, K, Kakao, Toss), was recorded at 15.76% as of the end of June, up 0.13 percentage points (P) from the end of the previous quarter.

The common equity tier 1 capital ratio and tier 1 capital ratio also rose by 0.18 percentage points each from the previous quarter to 13.18% and 14.51%, respectively. The simple tier 1 capital ratio increased by 0.14 percentage points to 6.76%. The current regulatory ratios are 8.0% for common equity tier 1 capital ratio, 9.5% for tier 1 capital ratio, 11.5% for total capital ratio, and 3.0% for simple tier 1 capital ratio.

By bank, Citi, Kakao, SC, KB, and Nonghyup exceeded 16% in capital ratios, showing very stable conditions, while K and JB were relatively low, below 14%. Based on the common equity tier 1 capital ratio, Citi, Kakao, and SC were above 14%, and KB, Toss, Nonghyup, and Shinhan were above 13%, indicating relatively high levels. Most banks, including Export-Import (+1.15 percentage points), SC (+0.74 percentage points), and Nonghyup (+0.54 percentage points), saw an increase in common equity tier 1 capital ratio compared to the previous quarter, whereas Toss (-0.17 percentage points), Hana (-0.09 percentage points), Shinhan (-0.06 percentage points), and Citi (-0.04 percentage points) experienced declines.

The Financial Supervisory Service emphasized that although the capital ratios of domestic banks increased compared to the previous quarter due to a slowdown in the growth of risk-weighted assets and solid profit realization, it is necessary to continuously enhance natural capital buffers. The increase in risk-weighted assets slowed from 78.5 trillion KRW in the first quarter to 46 trillion KRW in the second quarter. Consolidated quarterly net profit improved from 7 trillion KRW in the first quarter to 9 trillion KRW in the second quarter.

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The Financial Supervisory Service stated, "Given the increased volatility in financial markets due to uncertainties in major countries' monetary policies and geopolitical risks, there is a possibility of unexpected losses expanding, so it is necessary to continuously strengthen capital buffers in preparation for this." It added, "We will strengthen monitoring of the soundness status to ensure banks maintain sufficient buffer capacity even in deteriorating financial conditions and will continue to promote the improvement of related systems."

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