On Friday, KEB Hana Bank, a major commercial bank in South Korea, announced that global credit appraiser Moody’s Investors Service had increased its long-term foreign and local currency deposit ratings to Aa3 from A1 due to the bank’s enhanced key credit metrics.
Moody’s also upgraded KEB Hana Bank’s baseline credit assessment to a3 from Baa1 with a “stable” ratings outlook from positive, according to the bank.
Moody’s indicated that KEB Hana Bank had improved its financing system, asset quality, stability, and solvency margin, which led to the upgrade. The credit appraiser also noted that the bank had exhibited stronger asset performance through its loan mix changes, and its solvency and funding profile had strengthened.
Moreover, Moody’s stated that KEB Hana Bank’s asset quality had improved due to its loan portfolio rebalancing strategy. The large corporate loans mix had reduced, thus lowering concentration risks. As of March, large corporate loans accounted for 9 percent of KEB Hana Bank’s total loans, while small and medium-sized enterprise loans took up 43 percent, unsecured personal loans 11 percent, and mortgage loans 36 percent.
Moody’s projected that KEB Hana Bank would maintain stable asset quality and bolstered capitalization in the following 12 to 18 months.
The corporate logo of KEB Hana Bank (Yonhap)