Moody's lifts Korea Exchange Bank strength to D

Moody's Investors Service said it has raised Korea Exchange Bank's bank financial strength rating to D from D-. The revised rating carries a positive outlook.

As for the bank's credit ratings - Baa2/Baa3 senior/subordinated debt and Baa2/Prime-3 long-term/short-term deposits - they remain on review for possible upgrade, pending its acquisition by Kookmin Bank, rated A3/Prime-2/D+.

Moody's said the higher rating considers the bank's stronger operating and financial performance under Lone Star, which has been its shareholder since October 2003. Specifically, this better performance includes increasing economic solvency and improvements by management to strengthen the core banking business.

The positive outlook assumes that the bank will be able to sustain its performance despite any shareholder or management change, the agency said.

However, this situation is partially offset by the bank's high lending and equity exposure, while non-recurring income sources boosted larger profits of the past two years.

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