S&P affirms Korea Development Bank

Standard & Poor's said it affirmed the A/A-1 foreign-currency and A-1 local-currency ratings on Korea Development Bank.

The affirmation followed the establishment of Korea Finance Corp., a mandated policy-based company that took over KDB's policy role.

The outlook on the bank's long-term counterparty credit rating is negative.

S&P said the affirmation reflects the opinion that the extremely high likelihood of support from the government of Korea (foreign currency A/stable/A-1; local currency A+/stable/A-1) will be maintained after the spinoff.

The standalone credit profile of the bank is in the BBB category, reflecting its strong capitalization and strong market positions in the large corporate loan and domestic investment bank sector, the agency said.

The standalone credit profile is constrained by the bank's lack of a stable retail customer deposit base, concentrated loan portfolio and weak profitability, S&P noted.

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