Moody's rates KB Kookmin Card A2

Moody's Investors Service said it assigned A2 foreign-currency and local-currency issuer ratings to KB Kookmin Card Co., Ltd.

The outlook is stable.

KB Kookmin Card's A2 ratings incorporate the company's standalone assessment of Ba1 and a five-notch uplift for expected parental and government support, reflecting the very high likelihood of support from KB Financial Group via its sister company, Kookmin Bank and the high likelihood of support from the government of Korea, Moody's said.

KB Kookmin Card's A3 adjusted standalone assessment is at the same level as Kookmin Bank's A3 adjusted baseline credit assessment, the agency said.

The main drivers of KB Kookmin Card's Ba1 standalone assessment are its solid capitalization with its financial leverage of 5.3x, which positioned lower than the regulatory ceiling of 6x and good profitability despite the recent cut to its credit card merchant fees, Moody's said.

As a card company affiliated with Kookmin Bank, Korea's largest retail bank, KB Kookmin Card has a competitive advantage in acquiring new customers, utilizing Kookmin Bank's vast branch network, the agency said.

The company also has a sizable balance of unsecured loans, which tend to be of higher profitability than card purchases, Moody's added.

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