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Moody's Upgrades Outlook for S. Korean Securities Industry

According to Yonhap News,

(SEOUL=Yonhap News) Global rating agency Moody's Investors Service said Tuesday it has upgraded the outlook for South Korea's securities industry to stable, citing their steady profitability amid favorable business circumstances.

The agency changed the outlook for the local securities industry from negative to stable. "(This) reflects the expectation that the rise in asset risk for Korean securities companies will be offset by steady profitability against the backdrop of a supportive operating environment," Moody's analyst Ok Tae-jong said in a release.

Moody's also said the local securities' diversification and stable capitalization from additional capital raised "will help prevent a further deterioration in their creditworthiness over the next 12-18 months."

As for the local banking system, Moody's said its outlook remains stable based on the assessment that the credit profile of local lenders will stay sound at least over the next 18 months.

"When we look at the key drivers, we assess that the operating environment is stable; asset quality is benign; while capitalization, profitability, as well as funding and liquidity are all stable," said Sophia Lee, a Moody's Vice President and Senior Credit Officer.

Pointing to North Korea's agreement with South Korea and the United States on efforts for peace, the analyst said geopolitical risks on the Korean peninsula have "defused significantly."

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Source Text

** This article was translated from Korean.

Source: Yonhap News (June 19, 2018)

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