Moody's upgrades Industrial Bank of Korea

Moody's Investors Service said it upgraded to D- from E+ the bank financial strength rating of Industrial Bank of Korea. The A3 senior debt rating of the bank is unaffected. This action concludes the review begun on Sept. 22.

The outlook for the financial strength rating is positive and the outlook for all other ratings is stable.

The upgrade reflects the bank's success in improving asset quality and maintaining a stable financial profile. The bank has now dealt with the high delinquencies in its credit card portfolio that negatively impacted the bank over the past two years. Moody's also noted that the bank continues to update its credit systems and early warning procedures and, in Moody's opinion, the bank has improved its economic capital solvency levels.

Maintaining stable asset quality is still the main challenge facing the bank, given continued weaknesses at some small and medium enterprises, which the agency said have been affected by sluggish domestic demand, the strong won and high oil costs.

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