Citibank Korea Inc.

The stable outlook on CKI reflects our stable outlook on Citibank N.A., which is the U.S.-based lead bank of the group. We believe CKI will continue to play a critical role in the institutional banking business as a highly strategic subsidiary of the group over the next two years, at least. The group has both the capacity and willingness to provide significant support to CKI, if needed, in our view. We could downgrade CKI if we lower our ratings on Citibank N.A. We may also downgrade CKI if its strategic importance to the group weakens. This could happen if the group revises its strategy for the Korean market by unexpectedly reducing its institutional banking business. That said, we consider this

...Citibank Korea Inc. (CKI) will remain highly important to Citigroup's overall business strategy, focusing on the institutional business. This is despite the winding down of the bank's consumer banking business in phases. In our view, the bank will continue leveraging the group's global franchise and networks to provide various institutional banking services such as cash management, trade finance, and corporate lending. It will likely receive extraordinary support, including additional loss-absorbing capacity (ALAC) support, from the group under almost all foreseeable circumstances. The stand-alone credit profile (SACP) is not a major rating driver for CKI, given the bank's highly strategic group status. We expect CKI to maintain strong capitalization. This is backed by the bank's continuing focus on risk management over loan growth. Its loan book will likely contract moderately over the next few years, mainly from household loans, although this could be partly offset by modest growth in...

Full Report