As corporate credit ratings showed a marked polarization across industries, domestic corporate credit ratings showed a slight decline overall last year. This demonstrates that differences in economic trends across industries significantly impact corporate financial stability and credit ratings.
In a report released on January 2nd, Korea Credit Ratings revealed its overall corporate credit ratings through 2025, revealing that changes in creditworthiness across industry structures have become increasingly apparent. Indeed, while only 17 companies had their credit ratings upgraded last year, 22 companies were downgraded, indicating a greater number of downgrades. This indicates an overall strengthening of the downward bias.
By industry, the petrochemical and construction sectors saw their profitability deteriorate due to the global economic slowdown, fluctuating raw material prices, and the stagnant domestic real estate market. Consequently, many companies in these sectors experienced declining performance, leading to downgrades in their credit ratings. Furthermore, cultural content industries, such as gaming and movie theaters, faced negative reviews due to their inability to adapt to rapid changes in consumer trends and technology, weakening profitability.
The financial sector has also been hit hard. Savings banks and real estate trust companies suffered credit rating downgrades as profitability declined due to the weakening real estate market and loan soundness issues. A key factor was the continued rise in interest rates last year, which increased funding costs while reducing their ability to generate profits.
On the other hand, industries such as the power, defense, shipbuilding, semiconductor, and bio industries saw improved performance and stronger capital capacity amid a relatively favorable industrial environment. Life insurance companies and large securities firms also received positive evaluations, as their capital adequacy and scale improved. This is interpreted as the result of a complex mix of external factors, including technological competitiveness, recovering exports, and policy support.
Korea Credit Ratings forecasts that polarization across industries will deepen further this year. Jeong Seung-jae, Director of the Rating Policy Division, stated, "The K-shaped polarization of credit ratings will continue, depending on industry performance." He emphasized the need for caution, particularly regarding external variables such as the global trade environment, geopolitical tensions, the spread of artificial intelligence (AI) technology, and exchange rate and interest rate volatility. This divergence in credit ratings is expected to serve as a signal to investors once again highlighting the importance of risk management.
Get real-time news... Go to TokenPost Telegram
Copyright ยฉ TokenPost. Unauthorized reproduction and redistribution prohibited.
