Fitch affirms Woori Bank

Fitch Ratings said it affirmed Woori Bank's long-term foreign-currency issuer default ratings at A-, short-term foreign-currency issuer default rating at F2, senior unsecured debts at A- and subordinated debts at BBB+. Its hybrid securities were downgraded to BB+ from BBB-.

Also affirmed include parent company, Woori Finance Holdings' long-term foreign-currency issuer default rating at BBB+ and short-term foreign-currency issuer default rating at F2.

The outlook is stable.

The affirmations reflect the continued belief of an extremely high propensity for support from the South Korean government, given its systemic importance as one of the major commercial banks in South Korea and the government's majority ownership in the bank, Fitch said. The ratings also consider its strong local franchise, capitalization and adequate margin, but also its deteriorated loan quality and weak funding profile, the agency said.

The downgrade of Woori's hybrid securities reflects that they are performing, but there is an increasing probability of going concern loss absorption arising from the bank's weakened credit metrics and continued downward pressure on its loan quality, Fitch said.

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