Bank BIS capital ratios at the end of 2006 averaged 12.75%, slightly down from 12.95% at end-2005. With net income of KRW13.3 trillion for 2006, bank capital increased 16.1 trillion or 15.7% from a year earlier. But the increase was offset by a 17.5% jump in risk-weighted assets totaling KRW138.2 trillion, mostly due to the growth of mortgage and SME loans. Tier-1 capital rose 15.9% (KRW11.7 trillion) and tier-2 capital 15.1% (KRW4.4 trillion).

The capital ratio rose for six banks but fell for the 12 others compared to end-2005. In terms of international comparison, recent figures from IMF financial soundness indicators and others show that the 12.75% capital ratio for domestic banks is at the higher end of the 12.15%-12.76% range for U.S., U.K., and German banking organizations. With continued income growth and further room for tier-2 capital, domestic banks are expected to maintain robust capital positions going forward.

* Please refer to the attached PDF for details.