Korean banks increase BIS capital ratio in Q2

The capital adequacy ratio of South Korean banks edged up in the second quarter on account of solid earnings.

South Korea's Financial Supervisory Service reported that the average capital adequacy ratio under Basel II for 18 local lenders stood at 14.36 percent as of the end of June, up 0.02 percentage point from three months ago.

The ratio, which is calculated under the Basel II framework set by the Bank for International Settlements, rose in three quarters, indicating that domestic banks' ability to absorb potential losses in loans improved.

The FSS attributed the advance in the core capital ratio to banks' rosy earnings during the April-June period, but said the BIS ratio inched up over the same period as subordinated debts that mature less five years are gradually excluded from the supplementary capital.

All the 18 banks met the standard of financial soundness in the second quarter required by the financial watchdog, which asks banks to hold the BIS ratio and Tier I ratio at over 10 percent and 7 percent respectively.

The full story is available at Xinhua News.

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