Fitch ups Korea Exchange Bank to B/C

Fitch Ratings said it upgraded the individual rating on Korea Exchange Bank to B/C from C while affirming its long-term issuer default rating at BBB+, short-term rating at F2, support rating at 2, senior issue rating at BBB+, lower tier 2 issue rating at BBB and upper tier 2 issue rating at BBB-.

The outlook is positive.

After 2005s exceptionally strong profit, the bank's 2006 net profit was much lower, but still very good as per the Return on Average Assets of 1.5%, Fitch said.

Going forward, Fitch said it expects industry-wide profitability to come under some pressure from margin contraction. Another concern regarding the bank is the long-running efforts by Korean prosecutors to prove the bank's current owner - U.S.-based private equity fund Lone Star holds a 64% stake - used illegal means to acquire the bank back in 2003, in effect from the Korean government at a price below market-value.

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