South Korean bank capital cushion improved
(03-12 15:42)
South Korean banks' capital ratio rose last year as loan growth slowed, reducing risk-weighted assets relative to equity capital, financial watchdog data showed today.
Capital adequacy ratio under Basel 2 framework for 18 local lenders averaged 14.3 percent as of the end of 2012, up 0.34 percentage point from a year earlier, according to the Financial Supervisory Service. The rate was based on the Basel framework set by the Bank for International Settlement, Xinhua reports.
The Tier 1 capital ratio, which excludes supplementary capital such as subordinated debts from equity capital, increased 0.04 percentage point to 11.13 percent at the end of last year.
Loans denominated in the South Korean won grew 3.5 percent in 2012 after rising 7.8 percent in the prior year, reducing banks' risk-weighted assets relative to equity capital. Local lenders refrained from expanding loan books amid the faltering economic recovery.
Equity capital held by banks expanded in 2012 on the back of a growth in net profits and sales of subordinated bonds.
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