bank holding firms-capital ratio

SEOUL, March 14 (Yonhap) -- The capital adequacy ratio of South Korean bank holding companies nearly held steady in 2012 from a year earlier as they managed to secure ample equity capital against growing risk-weighted assets, the financial regulator said Thursday.

The average capital adequacy ratio of nine local bank holding companies, including top player Woori Finance Holdings Co., stood at 13.23 percent as of the end of December last year, down 0.01 percentage point from the previous year, according to the Financial Supervisory Service (FSS).

Compared with three months earlier, however, the figure gained 0.16 percentage point.

The slight on-year decline came as the bank holding firms saw their risk-weighted assets -- such as equities and loans -- grow, especially after the acquisition of the Korea Exchange Bank by No. 3 banking firm Hana Financial Group Inc. in April 2012.

The takeover raised the holding firms' overall risk-weighted assets to 236.7 trillion won (US$214.7 billion), up 23.8 percent from a year ago.

But the firms opted to issue more subordinated bonds under the Basel II framework to meet the capital requirements, boosting their equity capital, the FSS said.

Under the new Basel III that went into effect January this year, subordinated bonds are no longer counted as capital unless they meet certain criteria set by the Basel Committee for Banking Supervision.

The capital adequacy ratio of top player Woori Finance Holdings climbed 0.49 percentage point to 12.83 percent, with that of No. 4 player Shinhan Financial Group Co. gaining 1.05 percentage points to 12.46 percent. Second-largest KB Financial Group Inc. saw its ratio gain 0.9 percentage point to 13.90 percent.

But Hana Financial's figure slid 1.56 percentage points to 11.66 percent due to the takeover of KEB, and that of state-run KDB Financial Group slid 0.29 percentage point to 15.49 percent on a loan growth, the FSS added.

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