Fitch Rates Siam Commercial Bank's Debenture Programme 'F1+(tha)'

Thu Jun 26, 2014 1:08am EDT

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(The following statement was released by the rating agency) BANGKOK/SINGAPORE, June 26 (Fitch) Fitch Ratings has assigned a National Short-Term Rating of 'F1+(tha)' to Siam Commercial Bank Public Company Limited's (SCB) unsubordinated unsecured short-term debenture programme of up to THB50bn. This programme will replace SCB's existing THB50bn short-term debenture programme, which expires on 15 July 2014. Debentures issued under the programme will have a maturity of no more than 270 days, and can be issued in several tranches within the year. Proceeds from the issuance would be used for the bank's general corporate purposes. KEY RATING DRIVERS The programme is rated at the same level as SCB's National Short-Term Rating of 'F1+(tha)', as the debentures issued under the programme will constitute direct unsubordinated and unsecured obligations of the bank. SCB's ratings reflect its sound domestic franchise, particularly in retail banking and good performance, with consistent profitability. SCB has grown relatively quickly in recent years, but at the same time it has maintained acceptable levels of capital (with a consolidated Tier 1 ratio of 12.0%) and improved its asset quality buffers (as seen by strong loan loss reserve coverage of 148%. RATING SENSITIVITIES Any change in SCB's National Short-Term Ratings will affect the rating of the unsubordinated unsecured debentures. The National Short-Term Ratings are already at the top end of the scale, and hence, there is no upside. A downgrade may come from a very significant deterioration in asset quality and capital. However, we do not expect any such changes in the near term, as current buffers appear adequate to cope with a normal economic downturn. The other ratings of SCB are unaffected and are as follows: Long-Term Foreign Currency IDR: 'BBB+'; Outlook Stable Short-Term Foreign Currency IDR: 'F2' Viability Rating: 'bbb+' Support Rating: '2' Support Rating Floor: 'BBB-' National long-term rating: 'AA(tha)'; Outlook Stable National short-Term rating: 'F1+(tha)' Senior unsecured USD3.5bn MTN programme: 'BBB+' Long-term foreign currency senior unsecured debt: 'BBB+' National rating on long-term subordinated debt: 'AA-(tha)' Contacts: Primary Analyst Parson Singha, CFA Senior Director +662 108 0151 Secondary Analyst Patchara Sarayudh Director +662 108 0152 Committee Chairperson Jonathan Cornish Managing Director +852 2263 9901 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014, and "Assessing and Rating Bank Subordinated and Hybrid Securities", dated 31 January 2014, are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Assessing and Rating Bank Subordinated and Hybrid Securities Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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