Moody's: Challenges for Korean banks

Moody's Investors Service said in a new report that the first half of 2008 will be the most challenging funding period for Korean banks.

While Moody's acknowledges that liquidity in the system appears to be sufficient, the agency said refinancing costs will be substantially higher, thereby negatively impacting profitability.

Moody's said it expects Korean banks to pull through the current tight funding phase and for their financial fundamentals to remain broadly intact.

Existing bank financial strength ratings adequately cover the added stress from funding tightness, the agency said. The weighted average of bank financial strength ratings for the 14-rated banks is C- and incorporates some cushion, given the big event risk nature of the Korean market, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.