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Banks' average capital adequacy ratio rises in Q3

All News 12:00 December 01, 2021

SEOUL, Dec. 1 (Yonhap) -- South Korean banks saw their financial health improve in the third quarter from three months earlier thanks to increased profits and capital, data showed Wednesday.

According to the data by the Financial Supervisory Service (FSS), the average capital adequacy ratio of 16 commercial and state-run banks had stood at 15.9 percent as of end-September, up 0.24 percentage point from end-June.

The ratio is a key gauge of financial soundness by measuring the proportion of a bank's capital against its risk-weighted assets.

The Switzerland-based Bank for International Settlements, an international organization of central banks, advises lenders to maintain a ratio of 8 percent or higher.

The on-quarter rise came as local banks increased their capital and reported high net profits in the third quarter, the FSS said.

The FSS said most lenders had higher capital adequacy ratios than the international standard.

In particular, two internet-only banks -- Kakao Bank and K-Bank -- saw the ratios improve markedly as their capital holdings grew after their share sale in the third quarter, the regulator said.


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