The Financial Supervisory Service said on the 31st that banks' common equity tier 1 (CET1) capital ratio at the end of last year fell 0.12 percentage points to 13.51% from 13.63% at the end of the previous quarter. It said common equity declined due to the impact of settlement of account dividends following expanded shareholder returns, while risk-weighted assets of foreign-currency loan assets increased as the exchange rate rose.
Banks' tier 1 capital ratio and total capital ratio also fell by 0.08 percentage points and 0.09 percentage points, respectively, to 14.80% and 15.83% from the end of the previous quarter. The leverage ratio also fell 0.07 percentage points to 6.76%.
However, domestic banks' capital ratios remain well above regulatory levels. The regulatory ratios are a common equity tier 1 capital ratio of 8.0%, a tier 1 capital ratio of 9.5%, a total capital ratio of 11.5% (with an additional 1 percentage point for banks that are systemically important), and a leverage ratio of 3.0%, and starting in May 2024, a 1% countercyclical capital buffer has also been imposed.
According to the Financial Supervisory Service (FSS), KB, Woori, Citi, SC, Export-Import, Suhyup, Kakao, and Toss Bank exceeded 16% on a total capital ratio basis, showing a stable level. In contrast, BNK Financial Group was below 14%, indicating a relatively low level. For the common equity tier 1 capital ratio, Citi, SC, Export-Import, Suhyup, Kakao, and Toss Bank recorded 14% or higher, while KB, Hana, Shinhan, and the Korea Development Bank also stayed at 13% or higher, maintaining a relatively high level.