The BIS capital adequacy ratio of domestic banks as of the end of June this year averaged 11.73%, up from 11.20% at the end of 2003 and the highest since 11.95% at the end of the first half of 2001. The ratios rose for 12 banks and fell for 7 banks since the beginning of 2004.

A modest 3.4% increase in risk-weighted assets coupled with a fairly large KRW3.6 trillion jump in net income and an increase in government equity in the Korea Development Bank helped to push the overall BIS capital adequacy ratio for the first half of the year. Domestic banks also achieved a qualitative improvement in their capital base with Tier-1 capital rising KRW5.2 trillion won during the first half, compared with an increase of KRW1.1 trillion for Tier-2 capital.

* Please refer to the attached PDF for details.