Preliminary figures show bank BIS capital ratios averaged 13.08% at the end of June, compared with end-2005 average of 13.00%. Bank capital rose KRW9.1 trillion or 8.8% on robust net income totaling KRW8.1 trillion for the first half of 2006, compared with KRW64.6 trillion or 8.2% jump in risk -weighted assets. Tier-1 capital rose 11.0% (KRW8.1 trillion) versus a 3.3% increase (KRW1.0 trillion) for tier-2 capital.

The capital ratio rose for nine banks but fell for the others. Banks with higher capital ratios were helped by strong earnings. Kookmin Bank and the National Agricultural Cooperative Federation increased their tier-2 capital by KRW1.9 trillion and KRW800 billion, respectively, with subordinated debt issues. For most of the banks with lower capital ratios than at end-2005, capital increases did not keep pace with increases in risk-weighted assets. Capital ratio for Shinhan Bank fell modestly following its merger with Chohung Bank on April 1, 2006. All the banks reported BIS capital ratio higher than 10% at end-June.

* Please refer to the attached PDF for details.