AFX - 25 August 2006

SKorea's Standard Chartered First Bank rating affirmed on stong parent - Fitch


SEOUL (XFN-ASIA) - Fitch Ratings said that it has affirmed Standard Chartered First Bank's ratings, citing the strength of its parent Standard Chartered Bank (SCB).

The South Korean bank's long-term issuer default rating is set at 'A', short-term rating at 'F1', individual rating at 'C', and support rating at '1'.

The rating outlook is stable.

The rating agency noted that SC First Bank's profitability is expected to improve as SCB - which acquired the South Korean bank from Newbridge in April 2005 - redirects the bank towards higher yielding small- and medium-sized enterprises, credit cards and other unsecured personal loans.

'Though this will entail higher risk, Fitch understands that the move will be a gradual process and expects it to be well-managed as it is currently implementing the credit risk management systems of SCB,' it said.

Fitch also noted that SC First Bank's margins should improve faster due to more fee income, particularly from its treasury and trading services, as the bank leverages off SCB's global strength.