|
Financial regulators have told Korea's seven commercial banks to boost their Bank for International Settlements capital adequacy ratios to more than 12 percent by the end of this year, according to sources in the banking sector.
The new standard is much tougher than the 8 percent or above requirement. Banks that fail to meet the new standard face being part-nationalized in what is seen as the precursor to a wholesale government-led restructuring of the banking sector.
One bank executive said he had received a verbal guideline to raise the BIS capital adequacy ratio to above 12 percent by the end of the year and to boost the tier 1 capital ratio to more than 9 percent. Banks have also received official notices asking them to detail plans to strengthen their capital base.
As of the end of September, Kookmin, Shinhan, Woori, Hana, Korea Exchange, SC First banks and Citibank had BIS capital adequacy ratios of between 9 and 11 percent. That means banks must boost their capital by between W1 trillion (US$1=W1,394) to W1.5 trillion or reduce the size of their assets.
Also, the net capital ratio at the seven banks was between 7 to 8 percent, which is below the minimum 9 percent required by the Financial Services Commission.
An FSC official said the purpose of the requirement was to boost the lending capacity of commercial banks in preparation for next year, when corporate restructuring will go into full swing.
(englishnews@chosun.com )
|
