Update: Woori Bank

The stable outlook reflects our view that Woori Bank will maintain adequate capitalization over the next 18-24 months. This is despite the parent group's potential nonbanking business acquisitions. We expect Woori Bank's moderate loan growth to underpin its capital buffer. We also believe that Woori Bank will sustain its adequate risk management over the same period, such that its asset quality and credit costs remain comparable with those of major commercial bank peers. We believe the bank will maintain its strong market position and stable funding and liquidity profiles. We could downgrade Woori Bank if its capitalization weakens significantly, pushing its RAC ratio sustainably below 7%. The bank's RAC ratio could fall below 7% if it pursues rapid growth or

...Key strengths Key risks Strong market position as one of Korea's major commercial banks. Fewer cross-selling opportunities due to weaker nonbank financial affiliates than other domestic major commercial banking groups. Well-balanced and diversified loan portfolio. High household indebtedness can weaken asset quality amid elevated domestic interest rate. Adequate management of credit risks. Potential reputation risk arising from mis-selling of financial products....

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