(5) Capital management
The Group complies with the standard of capital adequacy provided by financial regulatory authorities. The capital adequacy ratio is based on Basel III of Basel Committee on Banking Supervision and Basel III was applied from the end of December, 2013. The capital adequacy ratio is calculated by dividing required capital by asset (weighted with a risk premium – risk weighted assets) based on the consolidated financial statements of the Group.
According to this regulation, the Group is required to meet the following new minimum requirements: 6.25% and 5.38% Common Equity Tier 1 capital ratio, 7.75% and 6.88% Tier 1 capital ratio and 9.75% and 8.88% total capital ratio as of December 31, 2017 and 2016, respectively. The details are as follows (Unit: Korean won in millions):
| December 31, 2016 | ||||
|
Tier 1 capital |
15,714,480 | |||
|
Other Tier 1 capital |
3,275,496 | |||
|
Tier 2 capital |
3,910,513 | |||
|
|
|
|||
|
Total risk-adjusted capital |
22,900,489 | |||
|
|
|
|||
|
Risk-weighted assets for credit risk |
138,018,500 | |||
|
Risk-weighted assets for market risk |
2,277,809 | |||
|
Risk-weighted assets for operational risk |
9,431,814 | |||
|
|
|
|||
|
Total risk-weighted assets |
149,728,123 | |||
|
|
|
|||
|
Common Equity Tier 1 ratio |
10.50 | % | ||
|
Tier 1 capital ratio |
12.68 | % | ||
|
Total capital ratio |
15.29 | % | ||
| December 31, 2017 | ||||
|
Tier 1 capital |
16,074,987 | |||
|
Other Tier 1 capital |
3,041,664 | |||
|
Tier 2 capital |
3,486,555 | |||
|
|
|
|||
|
Total risk-adjusted capital |
22,603,206 | |||
|
|
|
|||
|
Risk-weighted assets for credit risk |
134,767,711 | |||
|
Risk-weighted assets for market risk |
2,316,938 | |||
|
Risk-weighted assets for operational risk |
9,677,559 | |||
|
|
|
|||
|
Total risk-weighted assets |
146,762,208 | |||
|
|
|
|||
|
Common Equity Tier 1 ratio |
10.95 | % | ||
|
Tier 1 capital ratio |
13.03 | % | ||
|
Total capital ratio |
15.40 | % | ||