Standard & Poor's Ratings Services (S&P) announced yesterday that it had downgraded its outlook on the long-term credit rating for Kookmin Bank at BBB plus to ‘negative’ from ‘stable’.
The global ratings agency said the downgrade reflects concerns over Kookmin's credit to small- and medium-sized enterprises (SMEs) amid the economic downturn.
It added that the revision also incorporates the bank's weakened earnings prospects due to its relatively large exposure to credit card debt and its ability to manage these risks over the next few years
''The rising delinquent credit to SMEs and the deepening concern over household credit will continue to hurt the bank's earnings and asset quality for the next few quarters,'' S&P credit analyst Choil Young-il said.
''Plunging consumption and uncertain export prospects are likely to further damage the bank's credit to SMEs,'' he added.
