ID :
29248
Sun, 11/09/2008 - 11:00
Auther :
Shortlink :
https://www.oananews.org//node/29248
The shortlink copeid
S. Korean banks` Q3 capital adequacy ratios dip
SEOUL, Nov. 9 (Yonhap) -- South Korean banks' capital adequacy ratios deteriorated in the third quarter amid rising household debts, a wobbling property market and poor earnings, industry sources and financial regulators said Sunday.
The weakening financial health of local banks, including the nation's top lender,
Kookmin Bank, will likely place an additional burden on the South Korean economy,
which is reeling from the global financial crisis, analysts say.
In the three months to September, Kookmin Bank saw its capital adequacy ratio
under Bank for International Settlements (BIS) guidelines fall to 9.76 percent
from 10.49 percent.
It was the first time that Kookmin Bank's BIS capital ratio has declined below 10
percent since 2002.
While financial regulators require commercial banks to keep more than an eight
percent capital ratio, they recommend that lenders keep a ratio of 10 percent or
above.
The BIS capital ratio for Shinbank Bank, the nation's No. 3 lender, fell to 11.9
percent in the third quarter, from 12.5 percent a quarter earlier. Korea Exchange
Bank, owned by U.S. private equity fund Lone Star, saw the ratio slip to 10.64
percent from 11.56 percent.
"There are loads of risky factors for banks," said Daishin Securities analyst
Choi Jeong-wook, noting that bad loans to builders, losses from foreign-currency
option contracts and mounting household loans are all weighing on lenders at a
time when the property market is cooling.
"Over the next year, the banks should wage a battle against such risks," Choi said.
Major banks also suffered a sharp decline in their third-quarter profits, adding
to their woes.
Kookmin Bank's third-quarter net profit fell 28.6 percent from a year earlier to
553.3 billion won (US$418 million). Shinhan Bank reported a 32.2 percent plunge
in its third-quarter profit, bringing it to 214.3 billion won.
On Friday, Moody's Investors Service cut its financial strength outlook on Korea
Exchange Bank to "negative" from "stable," citing the "anticipated deterioration
in its creditworthiness."
The downgrade came days after Korea Exchange Bank posted a 22 percent drop in its
third-quarter profit.
On Oct. 1, Moody's also downgraded its financial strength outlook on the nation's
four major banks, including Kookmin Bank, Woori Bank and Shinhan Bank.
(END)
The weakening financial health of local banks, including the nation's top lender,
Kookmin Bank, will likely place an additional burden on the South Korean economy,
which is reeling from the global financial crisis, analysts say.
In the three months to September, Kookmin Bank saw its capital adequacy ratio
under Bank for International Settlements (BIS) guidelines fall to 9.76 percent
from 10.49 percent.
It was the first time that Kookmin Bank's BIS capital ratio has declined below 10
percent since 2002.
While financial regulators require commercial banks to keep more than an eight
percent capital ratio, they recommend that lenders keep a ratio of 10 percent or
above.
The BIS capital ratio for Shinbank Bank, the nation's No. 3 lender, fell to 11.9
percent in the third quarter, from 12.5 percent a quarter earlier. Korea Exchange
Bank, owned by U.S. private equity fund Lone Star, saw the ratio slip to 10.64
percent from 11.56 percent.
"There are loads of risky factors for banks," said Daishin Securities analyst
Choi Jeong-wook, noting that bad loans to builders, losses from foreign-currency
option contracts and mounting household loans are all weighing on lenders at a
time when the property market is cooling.
"Over the next year, the banks should wage a battle against such risks," Choi said.
Major banks also suffered a sharp decline in their third-quarter profits, adding
to their woes.
Kookmin Bank's third-quarter net profit fell 28.6 percent from a year earlier to
553.3 billion won (US$418 million). Shinhan Bank reported a 32.2 percent plunge
in its third-quarter profit, bringing it to 214.3 billion won.
On Friday, Moody's Investors Service cut its financial strength outlook on Korea
Exchange Bank to "negative" from "stable," citing the "anticipated deterioration
in its creditworthiness."
The downgrade came days after Korea Exchange Bank posted a 22 percent drop in its
third-quarter profit.
On Oct. 1, Moody's also downgraded its financial strength outlook on the nation's
four major banks, including Kookmin Bank, Woori Bank and Shinhan Bank.
(END)
