Kookmin Bank

The stable outlook on Kookmin reflects our view that the bank will maintain its adequate capitalization over the next 18-24 months backed by a moderate growth appetite and gradually improving profitability. We believe the bank's efforts over the past several years to tighten underwriting standards, write off bad loans, and build additional provisioning for weak corporate sectors will support its sound asset quality and credit costs. In addition, Kookmin will likely maintain its stable funding and liquidity profile backed by its solid nationwide customer base. We could lower our ratings on Kookmin if: The bank's asset quality deteriorates significantly with a surge in credit losses compared with the industry peer average; or The bank's capitalization weakens considerably, dragging the risk-adjusted

...Kookmin Bank is likely to maintain sound asset quality backed by its strengthened risk management. We expect the bank to prioritize credit risk management amid the receding COVID-19 pandemic, and tighten underwriting standards for household loans following a regulatory guideline. We anticipate that Korea's economic recovery from the COVID-19 pandemic will provide more stable operating conditions for banks in the country. We anticipate Kookmin will maintain adequate capitalization over the next two years. We expect the bank's moderating growth and improving profitability to support its capitalization. Kookmin's loan growth should moderate in the next two years after a high growth in 2020 driven by higher demand for loans from corporates and households affected by the COVID-19 pandemic. We anticipate a gradual increase in the bank's profitability over the next two years as net interest margins expand amid rising interest rates and credit costs decline modestly. Kookmin should sustain its...

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