Moody's cuts Daegu, Pusan outlook to negative

Moody's Investors Service said it has changed the outlook on the C- bank financial strength ratings of Daegu Bank and Pusan Bank to negative from stable.

However, all their debt and deposit ratings are unaffected and continue to carry a stable outlook, the agency noted.

"The rating action reflects the anticipated deterioration in the creditworthiness of these two regional banks due to intensifying stresses from the global credit crisis and a weaker domestic Korean economy," said Leo Wah, a Moody's VP/senior analyst.

"In Moody's opinion, the cushion in the current rating range is insufficient to cover such additional pressures and their eventual impact on the financial fundamentals of the banks," said Wah, adding, "Therefore, it may be difficult for them to maintain the C- rating range."

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