Moody's: Korea banks unchanged

Moody's Investors Service said that an expected surge in credit losses from a sluggish domestic housing market is unlikely to have material rating implications for most Korean banks.

A prolonged downturn in the Korean housing market should severely affect property developers and construction firms, which in turn would weigh on the earnings of Korean banks, Moody's said.

The agency said it does not see material rating implications for most banks in our expected case scenario analysis, as the current ratings and or outlooks of the banks already incorporate a certain level of stress, which appears to be in line with the current trend, the agency said.

However, a more severe stressed case analysis indicates that downgrades of bank financial strength ratings , particularly among the most exposed banks, cannot be ruled out as capital may erode as losses are absorbed by the those banks, Moody's said.

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