TEXT-Fitch rates Kasikornbank's senior notes 'BBB+'

Thu Feb 7, 2013 5:05am EST

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(The following statement was released by the rating agency)

Feb 07 - Fitch Ratings has assigned Kasikornbank Public Company Limited's (KBANK: 'BBB+'/Stable) USD500m outstanding senior unsecured notes due in March 2018 a 'BBB+' rating. The notes were issued under the bank's USD2.5bn euro medium term note (EMTN) programme through KBANK's Hong Kong branch. The proceeds were used for the bank's general corporate purposes.

Rating Action Rationale

The senior notes are rated at the same level as KBANK's Long-term Foreign Currency Issuer Default Rating (LTFC IDR) of 'BBB+' as they represent unsecured and unsubordinated obligations of the bank.

The ratings are based on the bank's sound capital and profitability, strengthened asset quality and reserves and its strong domestic franchise. Fitch believes the bank's overall financial position is sufficiently robust to absorb considerable credit stress. This is reflected in its Stable Outlook.

Rating Drivers and Sensitivities

A sustained increase in loan concentration or rapid growth leading to material deterioration in asset quality or a weaker liquidity profile could lead to a negative rating action on the bank's IDRs. A downgrade of Thailand's BBB+' Country Ceiling may also lead to a downgrade of the banks' IDRs as they are constrained by the Country Ceiling. Any changes in KBANK's LTFC IDR will result in a similar change in the rating of the senior notes.

Established in 1945 by the Lamsam family, KBANK is Thailand's fourth-largest commercial bank with a 15% market share of the sector's assets (as of end-September 2012). Its major subsidiaries focus on fund management, securities, leasing and insurance. KBANK's ownership is now widely dispersed with foreign, mainly institutional, shareholders holding a 49% stake. The Lamsam family still retains management positions and representation on the Board of Directors.

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