SEOUL, March 31 (Xinhua) -- South Korean banks' capital adequacy ratio fell in the fourth quarter of last year due to higher risk-weighted assets and lower capital, financial watchdog data showed Tuesday.
The total capital ratio for 28 banks, bank holding companies and internet-only banks under the Bank for International Settlements framework averaged 15.83 percent at the end of December, down 0.09 percentage points from three months earlier, according to the Financial Supervisory Service.
The ratio continued to go down for the second consecutive quarter.
Common equity decreased on the back of the payment of year-end dividends, offsetting solid net income.
Risk-weighted assets for foreign currency loans increased owing to the rising exchange rate.
The ratio, a barometer of financial soundness, measures the proportion of a bank's capital to its risk-weighted assets. Banks are required to maintain the ratio above 11.5 percent.
The tier-1 capital ratio, which gauges common stock capital and retained earnings, declined 0.08 percentage points from three months earlier to 14.80 percent at the end of December.
The common equity tier-1 capital ratio, or the proportion of common equity to risk-weighted assets, retreated 0.12 percentage points to 13.51 percent in the fourth quarter.
Banks are required to keep the tier-1 and the common equity tier-1 capital ratios above 9.5 percent and 8.0 percent, respectively. ■
