Online shopping mall Coupang has plunged into
impaired capital status after suffering losses of more than 600 billion won ($559 million) in 2017.
The still weak asset quality and the
impaired capital base are constraining factors.
Additionally, credit union-to-credit union transactions often occur when the to-be-acquired credit union is troubled and has an
impaired capital position.
The Financial Strength rating is unchanged at B- in view of the Bank's poor asset quality and severely
impaired capital. However, given the improvements in profitability, which appear to be sustainable, and the reduction in non-performing loans (NPLs) in 2010, a Positive Outlook is appended to the foreign currency and financial strength ratings.
Prior to the amendment, there were cases in which asset management companies with
impaired capital were given a high rating on capital adequacy because capital impairment was not a criterion used in assessing capital adequacy.
Some insurance companies withdrew from the market because of their inability to compete successfully,
impaired capital positions or because of a decrease in the availability of reinsurance.
Impaired capital assets that will no longer be used by the government should be reported at the lower of carrying value or fair value.
Furthermore, for permanently
impaired capital assets, the appropriate accounting and financial reporting depends on whether the asset is expected to remain in service.
Bank of Japan (BOJ) Governor Masaru Hayami said Wednesday an additional injection of public funds into banks may become necessary if they fail to improve their
impaired capital bases through self-support efforts.
Japan has funneled more than 10 trillion yen in public funds into banks'
impaired capital accounts since March 1998 to keep their depleted capital bases from crimping their ability to provide credits to businesses.
Bad loans have caused a deficit, which in turn, has
impaired capital. But this bank makes up only 3 percent of the assets of a strong BHC whose internal cash flows alone--without resort to borrowing--can easily recapitalize the errant subsidiary.
The credit crunch experienced in New England over the past two years is an example of a severe regional economic shock that was magnified by the
impaired capital position of most New England depository institutions.
