SEOUL, May 30 (Xinhua) -- South Korean banks' capital adequacy ratio fell in the first quarter due to an increase in risk-weighted assets and a decline in capital, financial watchdog data showed Thursday.
The total capital ratio for 28 banks, bank holding companies and internet-only banks under the Bank for International Settlements framework averaged 15.57 percent at the end of March, down 0.10 percentage point from three months earlier, according to the Financial Supervisory Service.
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 10.5 percent.
The risk-weighted assets gained on rising financial uncertainty, caused by high interest rates and the local currency's depreciation against the U.S. dollar, while the capital reduced due to losses related to equity-linked securities (ELS).
The tier-1 capital ratio, which gauges common stock capital and retained earnings, retreated 0.04 percentage points from three months earlier to 14.26 percent at the end of March.
The common equity tier-1 capital ratio, or the proportion of common equity to risk-weighted assets, decreased by 0.08 percentage points to 12.93 percent in the cited quarter.
Banks are required to keep the tier-1 and the common equity tier-1 capital ratios above 8.5 percent and 7.0 percent respectively. ■