South Korean banks to begin implementing Basel III by end-June

Kwangju Bank and JB will be the first to make the shift.

South Korea’s financial authority announced that 15 banks and eight bank holding companies will begin to gradually implement the Basel III credit risk framework beginning end-June.

This is expected to help boost the capital adequacy ratio of domestic banks and banks’ holding companies, the Financial Services Commission (FSC) said in a press release. In turn, the government expects that it will make more funding sources available and help support the real economy.

The new global banking capital rules, which include revisions in capital requirements and credit risk calculation, were set following the Global Financial Crisis (GFC).

Those implementing the new guidelines by end-June include Kwangju Bank and JB.

Shinhan Bank, Woori Bank, Kookmin Bank, Daegu Bank, Busan Bank, Jeju Bank, BNK Kyongnam Bank, Nonghyup Bank (NH), and Suhyup Bank (SH) will implement the new rules by end-September.

The Korean Development Bank (KDB) and Industrial Bank of Korea (IBK) will implement the rules beginning the end of the year. Hana Bank will shift to the new regulations by March 2020, whilst KEXIM Bank will begin the shift by end-June 2021.

Standard Chartered Korea, Kakao Bank and K Bank will begin to implement Basel III credit risk framework beginning in January 2023, the regulator added.

FSC asked banks and holding companies to inform authorities by end-May of their preferred date of implementation.