...State-Controlled Key Policy Bank: Industrial Bank of Korea's (IBK) important policy role of providing credit to SMEs and the state's solvency guarantee to the bank underpin Fitch Ratings' belief in the South Korean sovereign's high propensity to support the bank. We do not envisage the state's controlling ownership of IBK and the strength of state support changing significantly. IBK was 53% directly owned by the government and 3% indirectly through Korea Development Bank (KDB; AA-/Stable) and The Export-Import Bank of Korea (AA-/Stable) at end-1Q19. SME-Focused Policy Lender: IBK is a dominant SME lender in Korea, commanding 22% of the system's total SME loans at end-2018, and has a policy mandate to provide at least 70% of its funding to SMEs. It has carried out a countercyclical policy role to extend credit to viable SMEs when other local banks reduced their exposures, facilitated by the state's capital injections and guarantees. Most recently in February 2019, the bank received a KRW200...
