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[THE INVESTOR] Woori Bank, the country‘s third-largest lender by assets, said on Aug. 24 it will categorize loans to financially troubled Daewoo Shipbuilding & Marine Engineering as “precautionary,” one notch down from “normal.”
“As the largest creditor Korea Development Bank revised down its loan rating on the company, we decided to follow suit by the end of this month,” an official at the lender said.
The state-owned bank’s loans extended to the shipbuilder stand at around 490 billion won (US$436.72 million).
If the loans are categorized as precautionary loans, Woori will need to accumulate 7 percent to 19 percent of its loans for Daewoo as provisions.
Since March, other local banks including Kookmin Bank, Shinhan Bank, KEB Hana Bank and Nonghyup Bank have downgraded the shipbuilder‘s loan rating to precautionary.
The Financial Supervisory Service, the country’s top financial regulator, recommends banks place corporate loans into one of five categories: normal, precautionary, substandard, doubtful and estimated loss.
By Park Han-na (hnpark@heraldcorp.com)
