Moody's stated today that South Korean banks are at risk from an increasing number of so-called marginal companies with an extremely high debt burden. The agency said the country's banking sector is facing a "growing and significant risk" as it struggles to cope with rising levels of bad debt.
Moody's stated today that South Korean banks are at risk from an increasing number of so-called marginal companies with an extremely high debt burden. It said that it is expecting "large corporate loan exposures in structurally declining sectors to pose a significant risk to asset quality", and that the "greatest risk is from loans to the shipbuilding, steel and shipping sectors, where the number of marginal companies increased last year despite ongoing restructuring efforts".