The rating on Hanvit Bank reflects the continuing weakness of the Korean 'chaebols' (large corporations) to which the bank still has concentrated large exposure, and its weak capitalization in light of this credit risk. The ratings are supported by the bank's accelerated efforts to reduce its bad loans, an improved management strategy, and stabilization in market confidence in the bank after an infusion of public capital in December 2000. The operating environment for Korean banks is less severe than in the late 1990s, but uncertainty remains given a recent slowdown in the domestic economy. Hanvit's asset quality improved but remains weak due to its concentrated exposure to the chaebols. The creditworthiness of these large corporations remains fragile given the slow
