S&P lowers Woori outlook to negative

Standard & Poor's said it changed the outlook on the A-/A-2 counterparty credit ratings of Woori Bank and the BBB/A-2 counterparty credit ratings of Woori Finance Holdings Co. Ltd. to negative from stable.

The agency affirmed the counterparty credit ratings, as well as Woori Bank's A- senior unsecured foreign-currency rating, BBB+ subordinated foreign-currency rating, BBB junior subordinated and preferred stock foreign-currency ratings and A-2 commercial paper foreign-currency rating.

The agency said the outlook revision reflects potential risks posed by the simultaneous emergence of negative industry-wide factors that could put the ratings on Woori under downward pressure, although no single negative factor is likely to trigger a downgrade. S&P believes Woori has greater exposure to industry-wide risk factors than other major South Korean banks, partly due to its aggressive average loan growth of 29% for the past three years, compared with the industry average of 14%.

The affirmation reflects S&P's belief that the bank should maintain its satisfactory financial risk profile, backed by its strong asset quality and modest capitalization for the current ratings level, despite the industry-wide risks that lie ahead, including its large exposure to the fragile residential property development segment, a foreign-currency liquidity crunch and a potential economic slowdown.

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