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banks-capital adequacy ratio

Banks' capital adequacy ratio down in Q4 as risk-weighted assets increase

SEOUL, March 31 (Yonhap) -- South Korean banks saw their capital adequacy ratio inch down in the fourth quarter of last year due to increased risk-weighted assets, data showed Tuesday.

The average capital adequacy ratio of 17 commercial and state-run banks had stood at 15.83 percent as of end-December, down from 15.92 percent three months earlier, according to the preliminary data from the Financial Supervisory Service (FSS).

The watchdog said increased risk-weighted assets, including foreign currency-denominated assets, combined with increased payouts to shareholders, helped reduce the ratio.

The ratio, a key barometer of financial soundness, measures the proportion of a bank's capital to its risk-weighted assets.

The financial watchdog advises lenders to maintain a ratio of 11.5 percent or higher.

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