Moody's upgrades ratings outlook on Jeonbuk, Gwangju banks

By Kim Yoo-chul

Moody's Investors Service has left unchanged its A3 credit ratings on JB Financial Group's two banking affiliates ― Jeonbuk Bank and Gwangju Bank ― and revised up its outlook for the banks to “positive” from “stable.”

In a statement, Thursday, the U.S.-based credit ratings agency said that its revised outlook on the two regional banks was a reflection of the banks' improved performances, a plus factor in terms of asset quality and profitability.

The ratings agency also added the two banks were maintaining quite a stable capital adequacy ratio thanks to the pursuits of profitability-driven corporate growth strategies. Plus, the possibility that the banks will become recipients of government support was viewed as another reason for its revision of the banks to “positive.”

Regarding the release, JB Financial Group said the two banks will continue to optimize their asset portfolios and capital ratios with the strengthened credit outlook. On a related note, Moody's had also expressed a positive view on an earlier share swap decision made by JB and Gwangju Bank.

The swap implied that the holding company has strengthened capability to support its subsidiaries in terms of elevating their business efficiency.