The Financial Supervisory Service said on the 27th that as of the end of March this year, the common equity tier 1 ratio of domestic banks was 13.41%, down 0.09 percentage points from the end of the previous year (13.50%). It was analyzed to be due to an increase in risk-weighted assets of foreign-currency assets caused by a rise in the exchange rate.
The tier 1 capital ratio and total capital ratio were 14.66% and 15.64%, respectively, down 0.13 percentage point and 0.19 percentage point, respectively, from the end of the previous quarter. The leverage ratio also fell to 6.65%, down 0.12 percentage point from the end of the previous year (6.77%).
The Financial Supervisory Service (FSS) assessed that as of the end of March, capital adequacy was generally stable, with all domestic banks far exceeding the regulatory ratios. Based on the common equity tier 1 ratio, Citi, SC, K, Kakao, Toss, Suhyup and the Export-Import Bank recorded 14% or higher, while KB, Shinhan, Hana, Woori and the Korea Development Bank were at 13% or higher, a relatively high level.
Based on the total capital ratio, Woori, Citi, SC, K, Kakao, Toss, Suhyup and the Export-Import Bank exceeded 16.0%, showing stability. In contrast, BNK was below 14%, a relatively low level.
By bank, the common equity tier 1 ratio rose from the end of the previous year at five banks, including Kbank (7.04 percentage points), Woori Bank (0.72 percentage point), Toss Bank (0.39 percentage point), Industrial Bank of Korea (0.04 percentage point) and JB Financial Group (0.03 percentage point). In particular, Kbank saw a sharp improvement in its capital ratio due to the impact of its IPO. In contrast, 12 banks, including Citibank (3.64 percentage points), KakaoBank (0.97 percentage point), the Export-Import Bank (0.94 percentage point), Standard Chartered Bank Korea (0.79 percentage point) and Suhyup Bank (0.69 percentage point), saw declines in their common equity tier 1 ratios.
The Financial Supervisory Service (FSS) explained that while domestic banks' capital ratios declined from the end of the previous year, overall soundness remains at a favorable level as net income continues to be solid. It added, however, that the growth of loan assets and the rise in the exchange rate acted as factors lowering capital ratios.