S&P views Korea Investment negatively

S&P said it revised its outlook for Korea Investment & Securities Co. Ltd. to negative from stable and affirmed the BBB long-term issuer and senior unsecured debt ratings.

KIS' overall property exposure is about the same as its peers.

“Property risks remain high for Korean securities firms. These companies' sizable property exposure in both domestic and overseas markets could hurt their asset quality and result in subdued profitability in the coming one to two years,” S&P said in a press release.

Korean investment firms are invested in commercial real estate in the U.S. and Europe and the U.S. commercial real estate market suffered a 20% office vacancy rate in the fourth quarter of 2023. Additionally, Korea's property market is unlikely to rebound over the next one to two years, S&P said. Housing prices in the country declined by about 10% on average in real terms in 2023.

The potential for losses in these markets could strain profitability for Korean firms over the next one to two years, the agency said.

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