S. Korea's farm cooperative BIS ratio tops 12.5 pct

SEOUL, June 28 (Yonhap) -- South Korea's farmers' federation said Sunday that its
capital adequacy ratio may have reached 12.5 percent thanks to efforts by member
cooperatives to create fresh funds.

A total of 1 trillion won (US$778 million) worth of fresh funds has been
generated as of Friday following a capital fund drive that began in May, the
National Agricultural Cooperative Federation (Nonghyup) said in a press release.
???The increase in capital in such a short time is unprecedented in Nonghyup's
history and is a clear indication that member cooperatives are committed to
further improving the competitiveness of the organization," a spokesperson said.
He said the money will allow management to better cope with fast changing
developments taking place in the financial market and improve Noghyup's overall
ability to aid local farmers. The cooperative is one of the largest lenders in
South Korea and has extensive operational networks in rural areas.
The 2.4-million strong organization's Bank for International Settlements (BIS)
ratio, which measures capital adequacy, stood at 11.99 percent in late March.
The BIS ratio measures the percentage of a bank's capital to its risk-weighted
credit.
Nonghyup also said that the new funds will raise its first tier common capital
ratio from 7.80 percent three months ago to around 8.20 percent.
The increased capital, meanwhile, could help Nonghyup separate its economic and
financial holding companies, a key part of farm ministry-led reform efforts to
streamline operations at the oversized organization that has been cited for
inefficiency.
yonngong@yna.co.kr
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