Samsung, Hyundai, and Korean Financial Conglomerates Hit 177.6% Capital Adequacy Ratio, Up 3.3pp

The Quick Take

• South Korea's 7 financial conglomerates improved their aggregate capital adequacy ratio to 177.6%, up 3.3 percentage points year-over-year
• All 7 groups exceeded the regulatory 100% minimum threshold, including Samsung (191.2%), DB (207.9%), and Kyobo (201.5%)
• Combined equity capital rose 24.2% to 212 trillion won, driven by stock revaluation gains and insurance subsidiary capital issuance
• Dau Kiwoom saw the largest decline (down 17.1pp) while DB recorded the strongest improvement (up 12.9pp)

South Korea's Financial Supervisory Service reported that the nation's seven designated financial conglomerate groups improved their aggregate capital adequacy ratio to 177.6% as of end-2025, a 3.3 percentage point improvement from 174.3% a year earlier. The capital strength gain was driven primarily by stock portfolio revaluation gains flowing through other comprehensive income, and capital securities issuance by insurance affiliates within the groups. Combined equity capital reached 212 trillion won — a 24.2% year-over-year increase — well above the 119.6 trillion won in required capital, reflecting a comfortable 1.77x coverage ratio across the sector.

The per-group breakdown reveals meaningful dispersion. DB Financial Group led with a 207.9% ratio, improving 12.9pp annually, while Samsung Financial improved to 191.2% (up 6.1pp). Kyobo stood at 201.5%. At the lower end, Hyundai Motor's financial group fell to 145.5% (down 1.4pp) and Hanwha declined to 148.6% (down 6.3pp) — both still comfortably above the regulatory floor. Most concerning is Dau Kiwoom, where the capital ratio fell 17.1pp to 176.7%, the largest single-group decline, likely reflecting asset mix shifts and reduced unrealized gains in its securities portfolio.

The FSS will continue monitoring capital adequacy ratios quarterly, with particular focus on Dau Kiwoom and Hanwha given their declining trajectories. The key risk is a reversal of the equity market revaluation gains that drove the 2025 improvement: if Korean equities enter a sustained correction, capital ratios mechanically decline through the OCI channel. Watch for amendments to the Korean Financial Holding Company Act as the FSS signaled continued attention to internal transaction risk and risk concentration within diversified financial groups. The macro variable is global equity market performance through H1 2026, which directly determines the marked-to-market capital buffer across all seven groups.

Synthesized from 2 sources.