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S&P: Korea Exchange Bank on positive watch
Standard & Poor's said it placed its BBB/A-2 counterparty credit ratings on Korea Exchange Bank (KEB) and its rating on the bank's lower tier II subordinated bonds, on CreditWatch with positive implications.
The CreditWatch placement is due to the increased likelihood that KEB will be purchased by the stronger Kookmin Bank (A-/stable/A-2), the agency said.
S&P noted that the placement of the ratings on KEB on CreditWatch with positive implications reflects expectations that the higher rated Kookmin will provide strong support after the acquisition and that the market position of the combined bank should improve.
The banks' combined market share in the Korean banking industry total about 33% in terms of assets and 36% in terms of deposits, S&P said, noting that the ratings on KEB, along with the rating on its subordinated bonds, could be raised by one or two notches, depending on the funding structure Kookmin adopts, its negotiations with labor groups and its post-acquisition consolidation strategy.
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