banks-capital adequacy ratio
Banks' average capital adequacy ratio rises in Q4
SEOUL, March 30 (Yonhap) -- South Korean banks saw their financial health improve on-year in the fourth quarter of last year from three months earlier due to a decrease in risk-weighted assets, data showed Thursday.
According to the data from the Financial Supervisory Service (FSS), the average capital adequacy ratio of 17 commercial and state-run banks had stood at 15.25 percent as of end-2022, up from 14.84 percent three months earlier.
The FSS said that the on-quarter rise is due in part to a decline in their risk-weighted assets amid falling won-dollar exchange rates.
The ratio is a key gauge of financial soundness by measuring the proportion of a bank's capital against its risk-weighted assets.
The Switzerland-based Bank for International Settlements, an international organization of central banks, advises lenders to maintain a ratio of 8 percent or higher.
"The FSS will encourage banks to expand their loss-absorbing capacity so that they can remain sound and fulfill their roles in the face of internal and external economic shocks," it said.
(END)
(C) Yonhap News Agency. All Rights Reserved
