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[Alpha Biz=(Chicago) Reporter Paul Lee] Moody's, an international credit rating agency, lowered the outlook for domestic banks' credit ratings from 'stable' to 'negative'.
In a report released on the 7th, Moody's lowered its credit rating outlook for domestic banks and financial holdings to "negative," saying, "It is expected to weaken the business environment, soundness and profitability of Korean banks in the future." If the credit rating goes down, banks will have to finance dollar bonds at higher interest rates.
Moody's predicts that Korea's real GDP growth rate will remain at the 2% level by 2025, and that competition for loans will intensify due to the expansion of its share of alternative loan platforms and Internet banks.
It also pointed out that the net interest margin, the bank's leading profitability index, is also weakening due to weak private consumption, and predicted that the bank delinquency rate could rise to 0.5% from 0.38% at the end of last year. In particular, if the financial authorities judge the Hong Kong H Index Equity Linked Securities (ELS) scandal as an incomplete sale, they should start compensating investors.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
