The capital adequacy ratios of financial conglomerates such as Samsung, Hyundai Motor, and Hanwha showed a slight improvement. All seven financial conglomerates exceeded the regulatory ratio of 100%.
The Financial Supervisory Service said on the 24th that, as of the end of last year, the capital adequacy ratio of the seven financial conglomerates was tallied at 177.6%. This was an improvement of 3.3 percentage points from the end of the previous year (174.3%).
A financial conglomerate is a group that operates in at least two of deposit and loan services, insurance, and financial investment, with total asset aggregates of 5 trillion won or more. Currently, seven groups—Samsung, Hyundai Motor, Mirae Asset, Hanwha, Kyobo, DB, and Daou Kiwoom—are designated.
The capital adequacy ratio indicates a financial company's ability to withstand capital losses, and a higher figure is generally assessed as better in terms of stability and soundness. By group, DB had the highest capital adequacy ratio at 207.9%. It was followed by Kyobo at 201.5%, Samsung at 191.2%, Daou Kiwoom at 176.7%, Mirae Asset at 167.3%, Hanwha at 148.6%, and Hyundai Motor at 145.5%. For Kyobo, the capital adequacy ratio before applying the transitional measures of the insurance-sector Korea Insurance Capital Standard (K-ICS) was 151.0%.
At the end of last year, the integrated equity capital of the seven groups was 212.5 trillion won, up 41.4 trillion won (24.2%) from the end of the previous year. Integrated required capital was 119.6 trillion won, up 21.5 trillion won (21.9%) from the end of the previous year. This was due to an increase in asset scale following a rise in the book value of stocks and an increase in the total assets of overseas affiliated financial companies.
A Financial Supervisory Service (FSS) official said, "The increase in stock valuation gains following stock market revitalization and the issuance of capital securities by groups with insurance affiliates were the main drivers of equity capital growth," and added, "We will continue to monitor trends in capital adequacy in preparation for the possibility of greater volatility in financial markets, including interest rates and stock prices."