Bulletin: Korean Banks Can Hold On To Improving Profitability

HONG KONG (S&P Global Ratings) June 2, 2022--Korean banks will be able to maintain improving profitability resulting from rising domestic interest rates, S&P Global Ratings said today. We anticipate an increase in net interest margins will more than offset some rise in credit losses over the next two years. At the same time, adequate underwriting standards and risk management will likely keep overall asset quality sound. Industry risk in Korea's banking sector has improved, given the banks' increasing earnings capacity to absorb potential credit losses. We expect steady economic growth in Korea over the next two years despite uncertainties, such as the prolonged Russia-Ukraine conflict, slower China growth, and high inflation. Solid exports for the country's competitive manufacturers and an

...June 2, 2022 HONG KONG (S&P Global Ratings) June 2, 2022--Korean banks will be able to maintain improving profitability resulting from rising domestic interest rates, S&P Global Ratings said today. We anticipate an increase in net interest margins will more than offset some rise in credit losses over the next two years. At the same time, adequate underwriting standards and risk management will likely keep overall asset quality sound. Industry risk in Korea's banking sector has improved, given the banks' increasing earnings capacity to absorb potential credit losses. We expect steady economic growth in Korea over the next two years despite uncertainties, such as the prolonged Russia-Ukraine conflict, slower China growth, and high inflation. Solid exports for the country's competitive manufacturers and an increase in domestic demand amid the country's live-with-COVID transition will likely support the growth. We forecast Korea's real GDP to increase 2.5% in 2022 and 2.6% in 2023. The banks'...

Bulletin