AKP Phnom Penh, 05 December, 2025--
South Korean banks' capital adequacy ratio turned downward in the third quarter due to faster growth in risk-weighted assets than capital, financial watchdog data showed Friday.

The total capital ratio for 28 banks, bank holding companies and internet-only banks under the Bank for International Settlements framework averaged 15.87 percent at the end of September, down 0.14 percentage points from three months earlier, according to the Financial Supervisory Service.

The ratio shifted downward after going up for the past two quarters.

The downturn was attributed to a faster increase in risk-weighted assets, caused by the rise in the won versus the U.S. dollar exchange rate, which led to higher foreign currency-denominated loans than common equity capital.

The ratio, a barometer of financial soundness, measures the proportion of a bank's capital to its risk-weighted assets. Banks are required to maintain the ratio above 11.5 percent.

The tier-1 capital ratio, which gauges common stock capital and retained earnings, declined 0.09 percentage points from three months earlier to 14.84 percent at the end of September.

The common equity tier-1 capital ratio, or the proportion of common equity to risk-weighted assets, decreased 0.03 percentage points to 13.59 percent in the third quarter.

Banks are required to keep the tier-1 and the common equity tier-1 capital ratios above 9.5 percent and 8 percent, respectively.

AKP-Xinhua