Why Korean banks will remain under pressure

New measures to hold up margins, fees.

In a report, Fitch Ratings says Korea's banks are likely to remain under pressure as domestic economic growth moderates, their customer base ages and new regulations squeeze their margins and fees. 

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That said, the outlook for bank ratings remains stable.

In addition, Korean banks' customers in the shipbuilding, shipping and construction sectors face rising risks of collapse while banks will have to shoulder higher costs as the government demands they improve accountability and do more to support failing companies, Fitch says in a Special Report on the Korean banking system.

Fitch says the funding environment for Korean banks will remain stable.

The agency does not expect significant funding problems for Korean banks when the U.S. Federal Reserve starts to withdraw its monetary stimulus, assuming that the Bank of Korea and global central banks raise interest rates in line with their economic recoveries.