Moody’s lifts NongHyup Bank

Moody's Investors Service said it upgraded NongHyup Bank's long-term foreign-currency senior unsecured and issuer ratings to Aa3 from A1 and senior unsecured medium-term note program to (P)Aa3 from (P) A1. The agency also changed the outlook to stable from positive.

“NongHyup Bank has maintained good asset performance over the past few years through its multi-year loan portfolio rebalancing, shifting toward secured from unsecured loans. As a result, the bank's capitalization has strengthened with the bank taking lower credit risk than before. It also has a strong deposit franchise and funding profile due to its nationwide branch network that results in a low reliance on market funding,” Moody’s said in a press release.

The agency said that over the next 12-18 months it anticipates NongHyup Bank' asset quality to weaken modestly amid Korea's elevated interest rate environment, “but its ratio of problem loans to gross loans will remain below 1%.”

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