[Alpha Biz= Reporter Kim Sangjin] On the 20th (local time), global credit rating agency Moody's downgraded the credit rating outlook for KB Kookmin Card from 'Stable' to 'Negative'.
Moody's stated that the recent high-interest-rate environment has weakened the asset quality, reflecting downward pressure on the company's standalone creditworthiness.
Moreover, Moody's mentioned that KB Kookmin Card has been more negatively affected than other card companies due to the increase in individual debt restructuring cases.
As of the end of last year, KB Kookmin Card's ratio of impaired assets to total loans increased by 1 percentage point compared to the end of 2022, reaching 3.2% (compared to 2.2% at the end of 2022). KB Kookmin Card responded by reducing credit limits for borrowers with low credit ratings and increasing the provision coverage ratio to 121% higher than non-interest-bearing loans at the end of last year.
Moody's diagnosed that despite reducing credit limits for borrowers with low credit ratings and increasing provisions, there is still a risk of further deterioration in soundness this year due to the prolonged high-interest-rate environment.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
