Fitch: Stable credit quality likely for Korean banks in 08
Fitch Ratings has just published a special report titled “The Korean Banks: Annual Review and Outlook”, focusing on the five major commercial banks - Kookmin Bank (’A+’/Stable), Shinhan Bank (’A'/Stable), Woori Bank (Woori, ‘A-’ (A minus)/Positive), Hana Bank (’A-’ (A minus)/Stable) and Korea Exchange Bank (KEB, ‘A-’ (A minus)/Stable) - and notes that these five banks account for about 56% of system wide loans.
In the report the agency notes that, while the banking system continued to see solid results for 2007, the business environment has generally weakened since the end of last year. The agency highlights the system’s strong loans growth over 2006 and 2007 and subsequent concerns, given the softness in Korea’s property development market and the slowing economy.
“Despite the more challenging business environment, Korean banks are expected to maintain stable credit quality,” said Mic Kang, Director with Fitch’s Financial Institutions group. “The banks in general are well poised to weather a moderate economic slowdown and, subsequently, a certain degree of deterioration in asset quality on the back of the continued improvement in their fundamental financial strengths,” added Mr. Kang. — www.theasianbanker.com (March 28 2008)–