The South Korea Financial Supervisory Service published March 2026 capital ratio data showing domestic banks remained above regulatory requirements despite a quarter on quarter decline in core capital and leverage metrics. Banks’ common equity Tier 1 (CET1) ratio fell 0.09 percentage points from end-2025 to 13.41%, while the Tier 1 ratio declined to 14.66%, the total capital ratio to 15.64%, and the leverage ratio to 6.65%. The FSS attributed the decline mainly to risk-weighted assets rising faster than CET1 capital. Banks increased corporate exposure in the first quarter of 2026, and higher exchange rates lifted risk-weighted assets on foreign currency-denominated assets. The split by entity type showed lower average ratios at eight bank holding companies than at 20 banks, including CET1 of 13.08% versus 14.56% and leverage of 5.90% versus 6.47%. The March figures are preliminary. The regulator said it will guide domestic banks to strengthen loss-absorbing capacity and will continue to monitor capital ratios closely.
South Korea Financial Supervisory Service2026-05-28
South Korea Financial Supervisory Service reports March 2026 bank CET1 ratio at 13.41% with all capital ratios above requirements
South Korea’s Financial Supervisory Service reported that domestic banks’ capital and leverage ratios declined slightly in Q1 2026 but stayed above regulatory requirements, with the common equity Tier 1 ratio at 13.41% and the leverage ratio at 6.65%. The FSS attributed the decline mainly to risk-weighted assets rising faster than CET1 capital due to increased corporate exposures and higher exchange rates, and noted that bank holding companies reported lower average ratios than banks. The FSS will guide banks to strengthen loss-absorbing capacity and continue closely monitoring capital ratios.