...State Support-Driven IDRs: The ratings of Industrial Bank of Korea (IBK) are equalised with those of South Korea, reflecting Fitch Ratings' belief that the government's propensity to support the bank, if needed, is extremely high. Fitch views a loss-absorption clause in Article 43 of the IBK Act stating the government is required to cover any losses incurred by IBK that are not covered by the bank's internal reserves as a de facto state solvency guarantee. Government to Keep Majority Ownership: Fitch believes the government is committed towards holding its majority stake in IBK. The government has a 50.6% stake directly and an additional 11.1% through Korea Development Bank (AA-/Stable) and The Export-Import Bank of Korea (AA-/Stable). IBK operates with a hybrid objective of conducting the key policy function to support SMEs and maximising shareholder profits as a listed company. Policy Role, Commercial Approach: Fitch sees IBK's policy role to extend credit to viable SMEs as critical to...
