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Company NameCORE16 Inc.
CEODavid Cho
Business Registration Number762-81-03235
Address83, Uisadang-daero, Yeongdeungpo-gu, Seoul, 07325, Republic of KOREA

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셀스마트 자민 프로필 사진셀스마트 자민
Moody’s Maintains Negative Outlook on Korean Banks (Mar 14, 2025)
created At: 3/16/2025
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Neutral
This analysis was written from a neutral perspective. We advise you to always make careful and well-informed investment decisions.
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Fact
Korean banks' operating environment, asset quality, and profitability to deteriorate over the next 12-18 months 2025 GDP growth expected at 1.6%, with ROAA at 0.5-0.6% and NIM shrinking to 1.5% Loan delinquency rates in small business and unsecured personal loans to remain at ~0.5%
Opinion
Korean banks face fundamental headwinds from weak consumer demand, a slowing construction and real estate sector, export declines, and political uncertainty. Despite regulatory efforts, financial sector risks are expected to rise.
Core Sell Point
한국 은행주의 펀더멘털 약화와 경기 둔화 우려가 주가 하락 압력을 가할 수 있으므로, 투자자들은 보수적 접근과 함께 리스크 관리를 철저히 해야 한다.

Global credit rating agency Moody’s has maintained a negative outlook on South Korean banks, citing deteriorating operating conditions, asset quality, and profitability over the next 12 to 18 months. The agency warns that weak consumer spending, a sluggish construction sector, and slowing export growth are driving concerns over rising loan delinquency rates and worsening asset quality.

Moody’s forecasts South Korea’s real GDP growth to decline to 1.6% in 2025, significantly below the long-term average of 2.5%. The report also highlights political uncertainty, weak job growth, and a struggling real estate market, which are expected to dampen consumer sentiment and weigh on overall economic performance.

Key Risks for Korean Banks

  • Asset Quality: Delinquency rates in small business loans and unsecured personal loans are expected to remain around 0.5%, posing a broader financial sector risk. Despite regulatory measures

    such as stress capital buffers and Liquidity Coverage Ratios (LCRs), Korean banks still lag behind their global peers in terms of capital strength.

  • Profitability: Return on Average Assets (ROAA) is projected to decline to 0.5-0.6%, while Net Interest Margin (NIM) is expected to shrink from 1.6% to 1.5%. Though loan-loss provisions remain stable, weak profitability and deteriorating financial health of non-banking affiliates within financial groups pose additional risks.

[Compliance Note]

  • All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.

  • The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.

  • Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.

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