...IDRs Equalised with Sovereign's: Korea Development Bank's (KDB) Issuer Default Ratings (IDRs) are aligned with South Korea's ratings (AA-/Stable), reflecting Fitch Ratings' view there is an extremely high likelihood of state support flowing into KDB, if required. This view is underpinned by KDB's vital policy roles in the country's economy and banking system, the government's 100% ownership in the bank, and a loss-absorption clause in Article 32 of the KDB Act, which Fitch views as the government's de facto solvency guarantee. Cost of Corporate Restructuring: KDB's policy role has been highlighted by its lead role in recent years in the restructuring of troubled industrial sectors, especially the shipping and shipbuilding industries. It helped commercial banks reduce their risky exposures, but KDB was left to bear significant credit losses. KDB's net losses resulted in its reserve (the sum of retained earnings and capital surplus, or its own buffer before the government loss-absorption...
