Bangkok--15 Mar--Fitch Ratings
Fitch Ratings (Thailand) has assigned Korea-based Woori Bank's unsecured and unsubordinated THB-denominated bonds of up to THB8bn with a maturity of up to seven years a National Long-Term rating of 'AAA(tha)'. The proceeds will be used for the bank's general banking purposes. Rating Action Rationale
The 'AAA(tha)' rating for the notes is based on Woori's Long-Term Foreign Currency Issuer Default Rating (LTFC IDR) of 'A-'/Stable which is at the same level as Thailand's Long-Term Local Currency IDR (LTLC IDR) of 'A-'/Stable. 'AAA(tha)' is the highest on Thailand's National rating scale.
Woori's LTFC IDR reflects Fitch's continued belief of an extremely high propensity of the South Korean government (AA-/Stable) to support Woori, if required. This view is based on Woori's systemic importance as one of major commercial banks in South Korea and the government's majority ownership through Korea Deposit Insurance Corporation (KDIC). Being the second-largest bank in Korea, Woori holds 13% and 15% of the banking system's total assets and deposits, respectively.
Rating Drivers and Sensitivity
The debt rating could be downgraded if Woori's LTFC IDR is downgraded below Thailand's LTLC IDR; however, Fitch does not expect any change to the Woori's support-driven IDR unless there is evidence of a weakening of the sovereign's propensity or ability to support the bank. Alternatively, an upgrade of Thailand's LTLC IDR may also lead to Woori's debt being downgraded.
Woori was established in 1999. It had total assets of KRW241trn (USD211bn) at end-June 2012. The commercial bank is wholly owned by Woori Finance Holdings which in turn is 57%-owned by KDIC. KDIC has had plans to sell the holding company since 2002.