Korean Banks' BIS Common Equity Tier 1 Ratio at 13.62%, Up 0.12 Percentage Point from Previous Quarter

[Financial News] The common equity Tier 1 ratio of domestic banks under the Bank for International Settlements (BIS) standard rose slightly in the second quarter of this year. The increase in common equity capital outpaced the growth in risk-weighted assets. All domestic banks' capital ratios remained above regulatory requirements.
According to the 'Status of Domestic Banks' BIS-Based Capital Ratios as of End-June 2026' released by the Financial Supervisory Service on the 31st, the common equity Tier 1 ratio of domestic banks stood at 13.62%, up 0.12 percentage point from 13.50% at the end of March.
During the second quarter, domestic banks posted stable net income and increased common equity capital by 2.2%, or 8.8 trillion won, through paid-in capital increases and other measures. That outpaced the 1.7% increase in risk-weighted assets, which rose by 42.6 trillion won. Domestic banks' net income in the second quarter reached 7 trillion won, up from 6.8 trillion won in the first quarter.
The Tier 1 capital ratio rose 0.08 percentage point from the previous quarter to 14.84%, while the total capital ratio increased 0.03 percentage point to 15.77%.
Citibank posted the highest common equity Tier 1 ratio at 27.37%. It was followed by KakaoBank Corp at 20.98%, K Bank at 18.08%, Suhyup Bank at 15.77%, Standard Chartered Bank Korea Limited at 15.65%, and Toss Bank at 15.54%. Among financial holding companies, KB Financial Group had the highest common equity Tier 1 ratio at 13.74%, followed by Woori Financial Group at 13.71%, Shinhan Financial Group at 13.43%, and Hana Financial Group Inc. at 13.21%.
The total capital ratio exceeded 16% at Woori Bank, NACF, Citibank, Standard Chartered Bank Korea Limited, K Bank, KakaoBank Corp, Toss Bank, Suhyup Bank, and Korea Eximbank. BNK Financial Group Inc. was the only one below 14%, making it relatively low.
Compared with the previous quarter, NongHyup Financial Group saw the largest increase in its common equity Tier 1 ratio, rising 0.94 percentage point from 12.03% in the prior quarter, helped by a paid-in capital increase. Standard Chartered Bank Korea Limited also rose 0.78 percentage point to 14.86%. On the other hand, K Bank recorded the steepest decline, falling 1.39 percentage point from 19.47%. Korea Eximbank, Suhyup Bank, and BNK Financial Group also posted declines.
The Financial Supervisory Service said domestic banks' capital soundness is generally solid, but warned of the possibility of greater credit risk ahead. The agency stated, "We plan to encourage domestic banks to strengthen their loss-absorption capacity, which means building up capital to prepare for unexpected losses, and to reinforce capital adequacy management so they can maintain soundness steadily and faithfully carry out their core role as financial intermediaries."

[email protected] Park Moon-soo Reporter