Preliminary figures show that the BIS capital adequacy ratio of domestic banks at the end of 2004 averaged 12.09%, up from 11.16% a year earlier and the highest ratio ever. The capital adequacy ratio rose for 12 banks and fell for 7 banks for the year.
Risk-weighted assets rose 4.2% during 2004, but the increase was easily offset by a 12.9% jump in bank capital on the back of KRW8.8 trillion in net income for the year and capital increases by the government in Korea Development Bank. The quality of bank capital also showed much improvement in 2004 with Tier-1 capital rising KRW9.5 trillion compared with an increase of KRW300 billion for Tier-2 capital.
With a KRW37.8 billion drop in Tier- 2 capital, the six regional banks saw their average BIS capital adequacy ratio fall slightly in 2004 to 11.02% from 11.13% a year earlier. The drop, however, does not appear to warrant any particular concern as the regional banks maintained an overall ratio above 11% and thus did not need to issue high-yield subordinated bonds for Tier-2 capital.
* Please refer to the attached PDF for details.
Risk-weighted assets rose 4.2% during 2004, but the increase was easily offset by a 12.9% jump in bank capital on the back of KRW8.8 trillion in net income for the year and capital increases by the government in Korea Development Bank. The quality of bank capital also showed much improvement in 2004 with Tier-1 capital rising KRW9.5 trillion compared with an increase of KRW300 billion for Tier-2 capital.
With a KRW37.8 billion drop in Tier- 2 capital, the six regional banks saw their average BIS capital adequacy ratio fall slightly in 2004 to 11.02% from 11.13% a year earlier. The drop, however, does not appear to warrant any particular concern as the regional banks maintained an overall ratio above 11% and thus did not need to issue high-yield subordinated bonds for Tier-2 capital.
* Please refer to the attached PDF for details.