Moody’s Investors Service has taken multiple rating actions on 10 Korean financial institutions.
They are: Citibank Korea Inc, Export-Import Bank of Korea (KEXIM), Hana Bank, Industrial Bank of Korea (IBK), Kookmin Bank, Korea Development Bank (KDB), National Agricultural Cooperative Federation (NACF), Shinhan Bank, Woori Bank and Woori Finance Holdings.
These are entities whose foreign currency debt ratings are higher than that of the government and whose ratings were placed on review for possible downgrade on January 15, 2009.
Specifically, the following rating actions were taken:
(1) The foreign currency long-term senior debt ratings of eight banks were lowered to A2 – Hana Bank, IBK, KEXIM, Kookmin Bank, KDB, NACF, Shinhan Bank and Woori Bank. The revised ratings carry a stable outlook, except for KDB which has a negative outlook;
(2) IBK’s foreign currency subordinated debt rating was lowered to A2 from Aa3. The revised rating carries a stable outlook;
(3) NACF’s foreign currency subordinated debt rating of A2 was confirmed with a stable outlook;
(4) The A2 foreign currency long-term deposit ratings of eight banks were affirmed — Citibank Korea Inc, Hana Bank, IBK, Kookmin Bank, KDB, NACF, Shinhan Bank and Woori Bank. The ratings outlook is stable, except for KDB which has a negative outlook;
The above rating actions concluded the review initiated on January 15, 2009 to consider the appropriateness of the banks’ foreign currency debt ratings vis-a-vis the Korean government’s given the banks’ heavy dependence on government support to secure external funding.
(5) The C bank financial strength ratings (BFSR) of the big four nationwide banks – Kookmin Bank, Woori Bank, Shinhan Bank and Hana Bank – were placed on review for possible downgrade;
(6) Kookmin Bank’s foreign currency subordinated debt rating was lowered to A2 from A1 and remains on review for possible downgrade following the review of its BFSR; and
(7) In conjunction with the downward review of the big four banks’ BFSRs, the following ratings remain on review for possible downgrade: global local currency (GLC) deposit for Kookmin Bank and Hana Bank; foreign currency subordinated debt for Woori Bank, Shinhan Bank and Hana Bank; foreign currency Hybrid Tier 1 for Woori Bank and Shinhan Bank; and the A2 foreign currency issuer rating for Woori Finance Holdings; and
(8) Finally, the GLC deposit for Citibank Korea and KDB remain on review for possible downgrade. Citibank Korea’s review is due to the downward review of its BFSR following the rating actions on parent Citigroup and its related entities taken on January 16, 2009. KDB’s review is due to the examination of its probability of systemic support assumption used in the Joint-Default Analysis application in view of the proposed privatization plan and other factors
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