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Moody's revises outlook on Shinhan Card to stable

Moody's revised its outlook on Shinhan Card Co. Ltd.'s ratings to stable from negative following a similar action on the company's immediate parent, Shinhan Bank Co. Ltd.

Moody's also affirmed the South Korean company's long-term foreign currency and local currency issuer ratings at A2. The rating affirmation reflects Shinhan Card's strong domestic franchise, strong capitalization, stable profitability, modest asset quality and weak funding and liquidity profiles, the agency said Dec. 12.

Shinhan Card's "ba1" stand-alone credit profile remains unchanged.

The rating actions incorporate Moody's assessment that Shinhan Card will receive strong financial support from ultimate parent Shinhan Financial Group Co. Ltd., if necessary, given its strategic importance to its parent as the second-largest revenue generator for the financial group.

Moody's does not expect to upgrade the company's ratings in the near future. However, downgrade rating pressure could arise if there are signs of a decline in Shinhan Card's strategic importance to the group or if Shinhan Bank's baseline credit assessment is lowered from "a3."