S&P upgrades nine Korea banks

S&P said it raised the long-term issuer credit and senior unsecured debt ratings on nine Korean financial institutions including Kookmin Bank, Shinhan Bank, Woori Bank, Busan Bank, Daegu Bank, Korea Development Bank, Export-Import Bank of Korea (Kexim), Industrial Bank of Korea and Nonghyup Bank.

The ratings were upgraded following the upgrade of Korea’s sovereign credit ratings, S&P said.

The agency also said it raised the short-term rating on Industrial Bank of Korea to A-1+ from A-1 and the short-term rating on Woori Bank to A-1 from A-2.

The short-term ratings on the rest of the financial institutions were affirmed.

The outlooks on all of the banks are stable.

Korea Development Bank’s and Kexim’s ratings were raised to AA from AA-, equalizing the ratings with the sovereign ratings, S&P said. This reflects the banks’ integral links and critical roles within the government of Korea.

Industrial Bank’s long-term issuer credit and senior unsecured issue ratings were upgraded to AA- from A+, mainly reflecting its very strong link and critical role within Korea, the agency said.

The long-term issuer credit and senior unsecured issue ratings on NongHyup were upgraded to A+ from A, reflecting additional government notching given its very strong link and very important role in Korea, S&P said.

The long-term issuer credit and senior unsecured issue ratings on Kookmin and Shinhan were upgraded to A+ from A and Woori to A from A-. Woori’s Basel II subordinated issue rating also was upgraded to A- from BBB+. These upgrades mainly reflect additional government notching as these major commercial banks have a high likelihood of receiving government support by virtue of their high systemic importance, the agency said.

The long-term issuer credit and senior unsecured issue ratings on Daegu and long-term issuer credit rating on Busan were upgraded to A- from BBB+. The upgrades reflect additional government notching as both of these banks have a moderately high likelihood of receiving government support due to their moderate systemic importance in Korea, S&P added.

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