Moody's revised its outlook on KEB Hana Bank and Shinhan Bank Co. Ltd. to stable from negative, placed Woori Bank's ratings under review for upgrade and maintained KB Kookmin Bank's outlook at stable.
The rating agency said it placed Woori Bank's long-term ratings, long-term counterparty risk assessment of A1, baseline credit assessment and adjusted baseline credit assessment of "baa3" under review for an upgrade. The bank's short-term ratings and short-term counterparty assessment were affirmed.
Moody's affirmed the foreign and local currency long- and short-term deposit ratings of KEB Hana Bank and KB Kookmin Bank at A1 and P-1, respectively. Shinhan Bank's long- and short-term deposit ratings were affirmed at Aa3 and P-1. The baseline credit assessment and adjusted baseline credit assessment of KEB Hana Bank and Kookmin Bank were affirmed at "baa1" and those of Shinhan Bank at "a3."
The rating agency noted that the affirmation of the three banks' ratings and the placing of Woori Bank's ratings under review for upgrade reflect the improved operating environment of the banks. In addition, it expects structural changes in the banks' loan portfolio and their cost reductions will result in improved asset quality and profitability on a more sustained basis.
Meanwhile, Moody's said it placed Woori Bank's ratings under review for upgrade to determine whether recent improvements to the bank's credit fundamentals are structural and sufficiently sustainable. It will also consider any new information the South Korean government may announce regarding their plan for further sale of the government's remaining stake in the bank.