Fitch revises Shinhan Card view

Fitch Ratings said it affirmed Shinhan Bank's long-term issuer default rating at A with a stable outlook.

The agency also affirmed Shinhan Card Co., Ltd.'s long-term issuer default rating at A-, but the outlook was revised to negative from stable.

Fitch said the actions follow Shinhan Financial Group's decision to acquire a 59.2% stake in Orange Life Insurance Co., Ltd. for about KRW 2.3 trillion on Sept. 5.

The agency said it believes the acquisition will enhance the group's business model, franchise and earnings in the medium to longer term but at the cost of weaker capitalization and higher leverage.

Fitch said the different outlooks mainly reflect a belief of a strong regulatory bias in Korea towards prioritizing the protection of the creditors or depositors of an operating bank over the creditors of the rest of the holding company's units.

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