Kyobo Securities Upgraded to Credit Rating AA- with a 'Stable' Outlook

[Asia Economy Reporter Kum Bo-ryeong] Kyobo Securities' credit rating has been raised to AA-.

Kyobo Securities announced on the 19th that Korea Ratings' credit rating was upgraded one notch from A+ to AA-. The rating outlook was 'stable.'

Korea Ratings reflected in this evaluation the improved profit-generating ability based on diversified business sectors, reduction of high-risk assets through strengthened risk management, improvement of capital adequacy through paid-in capital increase, and the possibility of support from Kyobo Financial Group.

Kyobo Securities has maintained a return on equity (ROE) in the 9% range for five years since 2015 by strengthening its sales capabilities in asset management and investment banking (IB) sectors along with investment brokerage.

As of the end of September, the balance of contingent liabilities was 763.6 billion KRW, which was 62% of equity capital. This was maintained within the recommended limit of 100%. Since 2016, the issuance of principal non-guaranteed equity-linked securities (ELS) with high profit and loss volatility and high loss possibility has been restricted.

Korea Ratings explained, "Kyobo Securities has a stable profit structure through diversified business sectors," and added, "Although the domestic securities market is being reorganized mainly around large firms, it is expected to maintain the current level of market share and profitability in the future based on its diversified business portfolio."

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