Global credit rating agency Moody’s Investors Service has assigned South Korea’s KB Financial Group Inc. an A1 long-term foreign currency issuer rating with stable outlook, citing its importance in the country’s financial industry that would allow it to gain the government’s support in times of stress.

Moody’s announced on Monday that it awarded A1 long-term and Prime-1 short-term issuer credit ratings to KB Financial Group with a stable outlook for both ratings. An A1 credit rating is the highest credit rating to have been assigned to a Korean financial holding company and the fifth-highest among 21 credit ratings issued by Moody’s globally, KB Financial Group said.

Shinhan Financial Group and Hanwha Life Insurance Co. are the only financial companies in Korea that have been assigned the A1 credit rating by Moody’s.

Moody’s said the decision to assign a three-notch higher rating for KB Financial Group from its preliminary rating assessment was made after reflecting “the financial profiles, weighted by their relative size, of KB Financial Group’s key subsidiaries, including Kookmin Bank, KB Kookmin Card Co., and KB Securities.”

The rating also was rationalized thanks to “KB Financial Group’s diversified portfolio of subsidiaries, and the strong capital maintained at Kookmin Bank, which provides KB Financial Group with flexibility in servicing its debt,” the rating agency said in a press release.

But the most important factor that has led Moody’s to give such a high rating to KB Financial Group is the Korean financial group’s position in the country. There is “a very high probability of support from the government of Korea in times of stress, given KB Financial Group’s importance as the largest financial group by assets in Korea,” Moody’s said.

The agency added KB Financial Group’s credit ratings could be upgraded if financial soundness of its key subsidiaries significantly improves while at the same time its double leverage ratio remains stable.

Moody’s, meanwhile, also issued a separate statement assigning KB Securities, a wholly-owned unit of KB Financial Group, an A3 credit rating, the highest awarded to a Korean brokerage, with a stable outlook.

KB Securities is the only brokerage in Korea to be awarded a credit rating by globally renowned credit rating agencies Moody’s, Standard & Poor’s, and Fitch Ratings.

Moody’s noted that KB Securities plays an important role in KB Financial Group’s wealth management and corporate investment bank sectors and that it designs and provides customized products to all group units. KB Securities, the fourth-largest securities company in Korea in terms of asset size, is also expected to continue to maintain stable profitability and funding, the agency said.

Other units under KB Financial Group that have been awarded credit ratings by Moody’s are KB Kookmin Bank (Aa3), KB Securities (A3), and KB Kookmin Card (A2).

By Kim Tae-sung and Lee Eun-joo

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