Fitch cuts Kwangju Bank

Fitch Ratings said it downgraded Kwangju Bank's long-term foreign-currency issuer default rating to BBB from BBB+.

The outlook is stable.

The downgrade is driven by the bank's weakened underlying loan quality and its weak liquidity profile by international standards, Fitch said.

The agency also said it believes the bank's risk profile compares appropriately with C- to D-rated global peers on the individual rating scale.

While taking into account the bank's strong franchise in the city of Kwangju, the ratings also consider the bank's high geographical concentration and concerns on underlying loan quality, along with adequate but somewhat limited capitalization to absorb a substantial increase in credit costs, Fitch said.

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