Tokyo, March 30, 2006 -- Moody's Inverostrs Service has upgraded to Baa2/P-2 from Baa2/P-3 the long and short term deposit ratings of Pusan Bank, and the outlook on these ratings is stable. The bank financial strength rating (BFSR) of Pusan Bank has been upgreaded to D from D- and the outlook on the BFSR is positive. The upgrade of the long-term deposit rating reflects Moody's view that the bank will be able to enjoy higher levels of systemic support, as a result of its success in maintaining its strong market position in its region despite the onging consolidatation of major commercial banks in Korea. The bank's strong deposit base and large holdings of liquid assets underpin the upgrade of the short-term deposit rating. The BFSR upgrade is underpinned by sustained improvements in Pusan bank's asset quality, the bank's demonstrated ability to maintain its strong local market share of deposits and loan in Pusan whilst growing market share in the surrounding Gyeongnam provice, good profitability and a strong capital base. The cost base is slightly higher than nationwide banks, but Pusan bank cntinues to implement initiatives to contain the cost base. Moody's alos noted that the localized nature of the bank's franchies make it harder to generate a significant share of fee based revenues, so the bank remains more dependent on net interest income. Further upward pressure on the financial strength rating could result from the bank demonstrating its ability to sustain current levels of profitability and asset quality. Growth of stable stable sources of non-interest income and reductions in the cost base would also be positive for the financial strength rating. Pusan Bank is based in Pusan, Korea's second largest city. Established in 1967, the bank remains the dominant bank in Pusan city. As of December 21st, 2005 it had assest of KRW 19trn. The following ratings were affected: D- bank financial strength rating upgraded to D. The rating outlook is positive. Baa3/P-3 term / short term deposit ratings upgraded to Baa2/-2. The rating outlook is stable.