Financial conglomerates’ capital adequacy ratio at 186%; Kyobo and DB decline

[Financial News] The capital adequacy ratio of the seven financial conglomerates stood at 186% at the end of the first half of this year. This was up 8.4 percentage points from the end of last year. Samsung Group had the highest ratio, at 202.3%, while Hyundai Motor Group had the lowest, at 147.4%. All the groups were well above the financial authorities’ regulatory threshold of 100%.
According to the Financial Supervisory Service (FSS) on the 12th, the capital adequacy ratio of the seven financial conglomerates (Samsung, Hyundai Motor, Mirae Asset, Hanwha, Kyobo, Daou Kiwoom and DB) rose 8.4 percentage points from 177.6% at the end of last year. Toss, newly designated in July, was excluded from this calculation.
The financial authorities have designated financial conglomerates since 2021, following the enforcement of the Act on Financial Conglomerates. The designation applies to groups that operate in at least two of the following financial sectors: deposit-taking and lending, insurance, and financial investment; have at least one company licensed or registered by the Financial Services Commission (FSC); and have total assets exceeding 5 trillion won.
As of the end of the first half of this year, capital adequacy ratios ranked by financial conglomerate were Samsung (202.3%), DB (195.6%), Daou Kiwoom (184.1%), Kyobo (180.9%), Mirae Asset (169.8%), Hanwha (156.3%) and Hyundai Motor (147.4%). Compared with the end of last year, the ratios rose for Samsung (11.2 percentage points), Hanwha (7.7 percentage points), Daou Kiwoom (7.3 percentage points), Mirae Asset (2.5 percentage points) and Hyundai Motor (1.9 percentage points). Kyobo and DB fell by 20.6 and 12.3 percentage points, respectively.
The seven groups had combined capital totaling 306.2 trillion won, an increase of 93.7 trillion won (44.1%) from the end of last year. The FSS said this was due to an increase in stock valuation gains and in retained earnings among groups with financial investment affiliates.
Meanwhile, required capital also rose by 45 trillion won (37.7%) over the same period, reaching 164.6 trillion won. This was driven by an increase in market risk amounts as stock prices and interest rates rose, as well as an increase in risk assets as groups with insurance affiliates acquired financial companies.
The FSS assessed that all seven financial conglomerates had capital adequacy ratios above the regulatory threshold and that their loss-absorption capacity was at a sound level.
The FSS said, “To prepare for greater volatility in financial markets, including interest rates and stock prices, we will monitor their capital adequacy trends and encourage them to strengthen internal controls and risk management to manage risks associated with major shareholders’ capital contributions, among other things.”

[email protected] Park Mun-su Reporter