Thailand Financial News

Moody’s Investors Service has extended its review for possible upgrade of Korea Exchange Bank’s (KEB) long-term credit ratings. At the same time, the rating agency has also placed the bank’s D bank financial strength rating (BFSR) on review for possible upgrade.
Details of all ratings can be found below.

Previously, on March 27, 2006, Moody’s had initiated a review of KEB’s credit ratings following the selection of Kookmin Bank (rated A3/Prime-2/D+) as the preferred bidder for the acquisition of Lone Star’s interest in KEB. “This first review was to consider, as a result of the proposed sale, the bank’s admission into a financially stronger strategic parent as well as its greater systemic importance in the domestic banking landscape,” says Beatrice Woo, a Moody’s VP/Senior Credit Officer in Singapore. “However, Lone Star’s cancellation of the planned transaction means that upward pressure on its credit ratings from this front is no longer applicable,” adds Woo. “Nonetheless, Moody’s is maintaining its review of KEB’s long-term credit ratings, and will now consider the expected higher systemic support that may be awarded to the bank, given its sustained and meaningful market position,” says Woo. As for the BFSR, the review will consider the bank’s stronger credit worthiness. In particular, its economic solvency is rising, while its core banking business is also strengthening. “In order for the BFSR to move into a higher band, the bank will have to demonstrate its ability to sustain its operating and financial performance,” says Woo, adding, “Moreover, the situation is partially off-set by the bank’s high lending and equity exposures, while non-recurring income sources have boosted its profits for the past two years.” KEB was established in January 1967 by the government originally as a specialist foreign exchange bank. It retains its strength in trade finance and foreign exchange. In terms of assets, it ranks fifth among Korea’s nationwide commercial banks with 7% of system assets. It operates a branch network of 323 domestic and 26 overseas offices. The following ratings remain on review for possible upgrade:
Senior/subordinated debt of Baa2/Baa3; and foreign currency long-term deposit of Baa2. The following rating was placed on review for possible upgrade:
Bank financial strength rating of D. The following ratings were not affected:
Short-term debt of Prime-2; and short-term deposit of Prime-2. The outlook for the ratings is stable. –www.theasianbanker.com (November 30 2006)–