Bangkok--22 Feb--Fitch Ratings
Fitch Ratings (Thailand) has assigned Industrial Bank of Korea's (IBK) senior unsecured debentures of up to THB10bn with a minimum maturity of three years a National Long-Term 'AAA(tha)' rating. The proceeds will be used for general banking purposes. The 'AAA(tha)' rating reflects IBK's Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) of 'A+'/Positive being rated higher than Thailand's Long-Term Local Currency Issuer Default Rating (LTLC IDR) of 'A-'/Stable.
IBK's 'AAA(tha)' issue rating may be downgraded if its LTFC IDR falls below Thailand's LTLC IDR. However, this is unlikely given that IBK's LTFC IDR is two notches above Thailand's LTLC IDR and remains on Positive Outlook. IBK's LTFC IDR is at its Support Rating Floor of 'A+' which is on par with Korea's sovereign rating given the sovereign's solvency guarantees for the bank. This reflects Fitch's expectation of an extremely high probability of support from the South Korea government. Unless Korea's sovereign rating is downgraded or the bank's systemic importance and state support diminish, it is unlikely that IBK's LTFC IDR would be downgraded.
IBK was established in 1961 under the Industrial Bank of Korea Act. IBK's mandate is to provide financial services to SMEs to promote their independent economic activities and their economic status. The South Korean government holds a 72.1% stake in IBK.