Financial Conglomerates' Capital Adequacy Ratio Hits 186% at Midyear, Up 8.4 Percentage Points in Six Months

Seven groups: Samsung, Hyundai Motor, Mirae Asset, Hanwha, Kyobo, Daou Kiwoom, and DB
Combined capital reaches KRW 306.2 trillion, up 44.1% from the end of last year

The capital adequacy ratio of financial conglomerates stood at 186.0% in the first half of this year, rising by more than 8% from the end of last year and continuing to exceed the regulatory minimum of 100%.

The Financial Supervisory Service's Seoul headquarters in Yeouido, Yeongdeungpo-gu, Seoul.

According to the Financial Supervisory Service (FSS) on November 12, the capital adequacy ratio of the seven financial conglomerates—Samsung, Hyundai Motor, Mirae Asset, Hanwha, Kyobo, Daou Kiwoom and DB—rose by 8.4 percentage points from 177.6% at the end of last year. Toss, newly designated in July, was excluded from this calculation.

Under the Act on the Supervision of Financial Conglomerates, financial authorities have designated financial conglomerates since July 2021. A group qualifies if it operates in at least two of the following financial sectors: deposit-taking and lending, insurance, and financial investment; includes at least one company licensed or registered by the Financial Services Commission; and has total assets exceeding 5 trillion won.

The capital adequacy ratios 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 (by 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), while they fell for Kyobo (by 20.6 percentage points) and DB (12.3 percentage points).

The seven groups' combined capital totaled 306.2 trillion won, up 93.7 trillion won (44.1%) from the end of last year. The FSS attributed the increase to higher gains on stock valuations and increased retained earnings at financial investment affiliates.

Meanwhile, their combined required capital also increased by 45 trillion won (37.7%) over the same period, reaching 164.6 trillion won. The increase reflected a rise in market risk exposure as stock prices and interest rates climbed, as well as an increase in risk assets as insurance affiliates acquired financial companies.

The FSS said all seven financial conglomerates had capital adequacy ratios above the regulatory threshold and maintained sound loss-absorption capacity.

The FSS said, "To prepare for increased volatility in financial markets, including fluctuations in interest rates and stock prices, we will monitor these groups' capital adequacy trends and encourage them to strengthen internal controls and risk management to address risks arising from factors such as capital contributions by major shareholders."

This content was produced with the assistance of AI translation services.