Korea Investors Service Downgrades The K Savings Bank Credit Rating to 'BBB-'
On May 30, Korea Investors Service announced that it had downgraded The K Savings Bank's corporate credit rating from 'BBB' to 'BBB-'. However, the rating outlook was revised from 'Negative' to 'Stable'.
Korea Investors Service cited the deterioration in asset quality and profitability due to the increase in non-performing real estate-related loans as the background for the rating adjustment. The agency explained, "Since 2023, the realization of project financing (PF) risks has led to a rapid rise in the ratio of substandard and below loans, and since 2024, this indicator has exceeded 10%."
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The agency also pointed to the increased burden of leverage management due to capital reduction resulting from losses as a reason for the rating adjustment. Korea Investors Service stated, "Despite asset contraction, significant capital reduction due to losses resulted in a leverage ratio exceeding 10 times as of the end of March 2025. While the BIS (Bank for International Settlements) capital adequacy ratio stood at 14.7% at the end of March 2025, which is sound in absolute terms, the continued downward trend and the heavy reliance on supplementary capital remain concerns."
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