...Rising GDP Per Capita: Fitch Ratings' upward adjustments of its operating environment (OE) assessment for South Korea's (AA-/Stable) commercial lenders to a mid-point of `a+' with a stable trend from `a' captures the country's rising GDP per capita (USD31,600 in 2018), which is one of two core metrics Fitch uses to derive a banking system's OE score. Korea stood out with a 97.9 percentile ranking in 2018 under the World Bank's Ease of Doing Business index. Household Leverage Constrains OE Score: Fitch regards Korea's high household leverage as a constraint on its OE score, even though the country's rising GDP per capita, if sustained, could technically lead to a model-implied `aa' category OE score within two to three years. In assessing the OE, Fitch also considers a banking system's qualitative aspects and makes manual adjustments accordingly; for example, the size and structure of the economy, level and growth of credit, financial market development and the regulatory and legal framework....
