20250324_BBKP_Laporan Hasil Pemeringkatan_31870630_lamp2.pdf

3/19/25, 7:49 PM Fitch Affirms Bank KB Bukopin at 'BBB'/'AAA(idn)', Outlook Stable
Important Subsidiary: We assess Kookmin's propensity to support KB Bank as high despite
the continued challenges in KB Bank's financial performance. This is because the parent
remains committed to Indonesia as a growth market, in our view, which is unlikely to change
in the near term, and is demonstrated by Kookmin's repeated capital injections into KB
Bank in recent years. We also believe there would be a significant negative effect on the
group's reputation should KB Bank default, considering its shared branding and the group's
presence in multiple segments of Indonesia's financial sector.

Weak Financial Performance: KB Bank's weak financial performance is an important input
in our assessment of the parent's propensity to support the subsidiary. Continued poor
performance at KB Bank, without realistic prospects of aturnaround that raises doubt
about the viability of Kookmin's long-term strategy in Indonesia and the role of KB Bank
within the group, is likely to affect our assessment of support propensity and KB Bank's
ratings.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating
Action/Downgrade

KB Bank's Long-Term Foreign-Currency IDR and Shareholder Support Rating (SSR) could be
downgraded if we believe its parent's ability to support the bank has deteriorated. This
would most likely happen if we downgrade Kookmin's VR by a minimum of two notches.
However, we believe this to be unlikely in the near to medium term.

A downward revision in Indonesia's Country Ceiling of 'BBB' would also lead to a
downgrade of KB Bank's Long-Term Foreign-Currency IDR and SSR.

A decline in the parent's propensity to provide support could also trigger downward rating
action on the SSR and Long-Term IDRs. This could arise from major ownership changes or if
we assess that the parent's long-term commitment towards Indonesia and/or KB Bank is in
doubt due to the subsidiary's persistent weak performance, despite Kookmin's record of
support for KB Bank's operations to date.

A downgrade of Kookmin's VR would result in a downgrade of KB Bank's Long-Term Local-
Currency IDR.

Negative rating action on KB Bank's National Long-Term Rating could arise from a decline in
its credit profile relative to the universe of entities rated on our Indonesian National Rating

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3/19/25, 7:49 PM Fitch Affirms Bank KB Bukopin at 'BBB'AAA(idn)': Outlook Stable

scale. It could stem from a downgrade of KB Bank's Long-Term Local-Currency IDR by a
minimum of two notches.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

An upward revision in Indonesia's Country Ceiling would lead to an upgrade of KB Bank's
Long-Term Foreign-Currency IDR and SSR.

KB Bank's Long-Term Local-Currency IDR could be upgraded if we believe that KB Bank's
prospects have improved sustainably, which could lead us to narrow the notching with the
anchor rating. This could stem from sustained operating profitability over several years. An
upgrade of Kookmin's VR may result in an upgrade for KB Bank provided we believe the
parent's propensity to support the subsidiary is unchanged.

There is no rating upside for KB Bank's National Long-Term Rating as it is already at the
highest point on the scale.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

KB Bank's US dollar senior unsecured bonds are rated at the same level as the bank's Long-
Term Foreign-Currency IDR, in line with Fitch's Bank Rating Criteria, as they constitute the
bank's direct and senior unsecured obligations and rank egually with all its other senior
unsecured and unsubordinated obligations.

KB Bank's rupiah-denominated deferrable Tier 2 subordinated bonds are rated two
notches below its anchor rating, the bank's National Long-Term Rating. Both notches are for
loss severity, reflecting the bonds' subordination and our view of poor recovery prospects
compared with senior unsecured obligations. The Tier 2 debt instruments have an
embedded permanent write-down feature (principal and/or interest in full or in part) that
can be triggered when the bank approaches its point of non-viability.

KB Bank's bonds incorporate features that allow coupons to be deferred and accumulated
if the bank's capital position falls below the regulatory reguirement. However, there is no
additional notching for non-performance risk, as we believe that this risk is neutralised by
potential parental support from Kookmin before this trigger is reached. This approach is
consistent with Fitch's Bank Rating Criteria for subordinated bonds where the anchor is the
support-driven IDR.

KB Bank's National Long-Term Rating is mapped from its support-driven Long-Term Local-
Currency IDR.

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3/19125, 7:49 PM Fitch Affirms Bank KB Bukopin at 'BBB'/AAA(idn)': Outlook Stable
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

A downgrade of KB Bank's Long-Term Foreign-Currency IDR would lead to a corresponding
downgrade of the US dollar senior unsecured bond ratings. A downgrade of the National
Long-Term Rating would lead to a downgrade of the rupiah-denominated subordinated
bond ratings.

A reassessment of non-performance risk, leading to a widening of notching, would result in
a downgrade of the rating of the subordinated bonds even if the anchor rating remains
unchanged. This would most likely result from a material decline in KB Bank's common
eguity Tier 1 capital ratio below 6.59, such that we believe capital buffers are inadeguate
over the coupon omission triggers. However, we believe this scenario to be unlikely.

An upgrade of KB Bank's Long-Term Foreign-Currency IDR would lead to a corresponding
upgrade of the senior unsecured bond ratings. However, we believe this to be unlikely in the
near to medium term as the rating is constrained by Indonesia's 'BBB' Country Ceiling.

An upgrade of the subordinated bond ratings is unlikely based on the criteria.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are described in the Applicable
Criteria.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

KB Bank's ratings are credit-linked to Kookmin's VR based on our expectation of
extraordinary support.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is ascore of '3' unless otherwise disclosed in this
section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit
impact on the entity, either due to their nature or the way in which they are being managed
by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process, they are an
observation on the relevance and materiality of ESG factors in the rating decision. For more
information on Fitch's ESG Relevance Scores,
visithttps://www,fitchratings.com/topics/esg/products#esg-relevance-scores.

RATING ACTIONS

«id

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3/19/25, 7:49 PM Fitch Affirms Bank KB Bukopin at 'BBB'AAA(idn)': Outlook Stable

ENTITY /DEBT $ RATING PRIOR $
PT Bank KB Bukopin, BBB
LTIDR BBB Affirmed
Tbk
BBB#
LCLTIDR  BBB# Affirmed
AAAfidn)
NatILT  AAAfidn) Affirmed
bbb
Shareholder Support bbb Affirmed
senior unsecured BBB
LT BBB  Affirmed
subordinated AAflidn)

NatILT  AAlidn) Affirmed

Page 1 of1 10 rows “

VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

PARTICIPATION STATUS

The rated entity (and/or its agents) or, in the case of structured finance, one or more of the
transaction parties participated in the rating process except that the following issuer/s), if
any, did not participate in the rating process, or provide additional information, beyond the
issuer's available public disclosure.

APPLICABLE CRITERIA

National Scale Rating Criteria (pub. 23 Dec 2020)
Bank Rating Criteria (pub. 16 Mar 2024) (including rating assumption sensitivity)

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3/19/25, 7:49 PM Fitch Affirms Bank KB Bukopin at 'BBB'AAA(idn)': Outlook Stable

ADDITIONAL DISCLOSURES
Dodd-Frank Rating Information Disclosure Form

Solicitation Status

Endorsement Policy

ENDORSEMENT STATUS

PT Bank KB Bukopin, Tbk EU Endorsed, UK Endorsed

DISCLAIMER & DISCLOSURES

All Fitch Ratings (Fitch) credit ratings are subject to certain limitations and disclaimers.
Please read these limitations and disclaimers by following this link:
https://www.fitchratings.com/understandingcreditratings. In addition, the following
https://www.fitchratings.com/rating-definitions-document details Fitch's rating definitions

for each rating s

READ MORE

SOLICITATION STATUS

The ratings above were solicited and assigned or maintained by Fitch at the reguest of the
rated entity/issuer or a related third party. Any exceptions follow below.

ENDORSEMENT POLICY

Fitch's international credit ratings produced outside the EU or the UK, as the case may be,
are endorsed for use by regulated entities within the EU or the UK, respectively, for
regulatory purposes, pursuant to the terms of the EU CRA Regulation or the UK Credit
Rating Agencies (Amendment etc.) (EU Exit) Regulations 2019, as the case may be. Fitch's
approach to endorsement in the EU and the UK can be found on Fitch's Regulatory Affairs
page on Fitch's website. The endorsement status of international credit ratings is provided
within the entity summary page for each rated entity and in the transaction detail pages for
structured finance transactions on the Fitch website. These disclosures are updated on a
daily basis.

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