DGB Financial, Internal Ratings-Based Approach Approved... "First Regional Financial Holding Company"

"BIS Total Capital Ratio and Common Equity Tier 1 Ratio Expected to Increase by About 2%p or More"

[Asia Economy Reporter Park Sun-mi] DGB Financial Group announced on the 9th that it has received final approval from the Financial Supervisory Service to use the internal ratings-based approach for credit risk under Basel III, becoming the first regional financial holding company to do so.

Applying the internal ratings-based approach reduces risk-weighted assets (RWA) compared to the standardized approach, which only allows the use of credit ratings evaluated by credit rating agencies. As a result, there is an effect of increasing the capital adequacy ratio based on the Bank for International Settlements (BIS) standards.

As of the end of December 2020, DGB Financial's total BIS capital ratio was 12.41%, and the common equity tier 1 capital ratio was 9.59%. It is expected that applying the internal ratings-based approach will increase both the total BIS capital ratio and the common equity tier 1 capital ratio by more than approximately 2 percentage points. This approval was achieved as a result of securing an advanced risk management foundation and is expected to contribute to enhancing the group's capital adequacy and external credibility.

Chairman Kim Tae-oh explained, "This approval is the result of continuously improving the risk management level of DGB Financial Group," adding, "It means that the financial authorities have recognized that DGB Financial Group's risk management level meets international standards."