Moody's upgrades 11 Korean financial institutions

Moody's Investors Service said it raised the ratings for 11 Korean financial institutions: Export-Import Bank of Korea, Hana Bank, Industrial Bank of Korea, Kookmin Bank, Korea Development Bank, Korea Exchange Bank, National Agricultural Co-operative Federation, Shinhan Bank, Standard Chartered First Bank, Woori Bank and Woori Finance Holdings.

For Hana Bank, Shinhan Bank and Woori Bank, the following ratings were raised: long-term senior debt to A3 from Baa1 and deposit to A3 from Baa1. For Hana Bank and Shinhan Bank, the short-term debt was also raised to P-1 from P-2.

The revised long-term ratings have positive outlooks while the revised short-term ratings have stable outlooks.

At the same time, the short-term debt ratings for six banks were raised to P-1 from P-2: Export-Import Bank of Korea, Industrial Bank of Korea, Kookmin Bank, Korea Development Bank, National Agricultural Co-operative Federation and Standard Chartered First Bank.

For Korea Exchange Bank, the short-term debt and deposit were raised to P-2 from P-3. The revised debt rating remains on review for possible upgrade while the revised deposit rating carries a stable outlook. The senior/subordinated debt of Baa2/Baa3 and long-term deposit of Baa2 remain on review for possible upgrade.

In Moody's view, Hana Bank, Shinhan Bank and Woori Bank have increased their importance and are resilient players in a concentrated and highly supportive system. Consequently, the ratings agency believes that the banks, along with Kookmin Bank, are vital to the Korean banking system, given their 56% control of system deposits.

As for the remaining banks, the upgrades incorporate the stronger liquidity positions at the banks since the Asian financial crisis and their ongoing systemic importance, the agency said.

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