Bank BIS capital ratios averaged 13.18% as of the end of March, 2006, up from 13.00% at the end of 2005. The end-March capital ratio is the highest ever reported by domestic banks. Risk-weighted assets rose KRW17.4 trillion or 2.2% during the first quarter, but bank capital also rose KRW3.7 trillion or 3.6% on the back of KRW3.9 trillion in net income during the period. Tier-1 capital increased KRW3.9 trillion or 5.3%, while tier-2 capital showed a modest drop of KRW500 billion or 1.6%.

Six banks reported capital ratios higher than at the end of 2005, but the rest reported slightly lower ratios for the quarter. All the banks reported capital ratios higher than 10%, which compares favorably with international capital standards. The capital soundness of domestic banks is expected to remain strong with further increases in tier-1 capital and additional room for tier-2 capital.

* Please refer to the attached PDF for details.