(The following statement was released by the rating agency)
BANGKOK/SINGAPORE, August 19 (Fitch) Fitch Ratings has affirmed
TMB Bank Public
Company Limited's (TMB) Long-Term Issuer Default Rating (IDR) at
Long-Term National Rating at 'A+(tha)'. The Outlook is Stable.
A full list of rating actions is included at the end of this
KEY RATING DRIVERS - VR, IDRs, National Ratings
TMB's IDRs and National Ratings are based on its standalone
which is reflected in its Viability Rating (VR) of 'bbb-'. The
its sound franchise as a mid-sized bank in Thailand (with the
share of the loan and deposit market) in a challenging operating
The ratings also take into account the improvement in recent
years in TMB's
overall financial performance, particularly in asset quality.
The bank's NPL ratio declined to 4.5% while reserve coverage
increased to 140%
at end-2013 from 9.9% and 57% respectively at end-2010. The bank
of NPLs in 2Q14 and the NPL ratio has dropped further to 4.1% at
Nevertheless, the uncertain and fragile operating environment
challenge - around 40% of TMB's loan portfolio is extended to
small and medium
enterprises (SMEs), which may be more vulnerable in an economic
In 2013, TMB had return on assets (ROA) of 0.8% and return on
equity (ROE) of
9.7%, which were lower than the local peer average (ROA: 1.3%,
Fitch expects TMB's loan growth of 2% in 1H14 to pick up in
2H14, if the
operating environment remains favourable. We expect TMB's
steadily improve in the next two to three years, barring any
shocks, as it focuses on SMEs rather than corporates.
Fitch believes TMB's capitalisation is adequate and comparable
to peers' - its
core Tier 1 capital was 9.9% and Fitch Core Capital was 11.4% at
would provide some buffer to potential credit loss. TMB's
funding and liquidity
profile are also sound and compare favourably with its peers'.
The bank has also
increased the proportion of low-cost deposits in its overall
RATING SENSITIVITIES - VR, IDRs, National Ratings
A material reversal of recent gains in key financial measures,
such as asset
quality and earnings, and a material increase in risk appetite,
if not offset by
strengthened capital and profitability buffers, could lead to a
upgrade is unlikely in the near term because further improvement
overall credit profile is likely to be gradual and this has been
KEY RATING DRIVERS - Support Rating and Support Rating Floor
The Support Rating and Support Rating Floor reflect Fitch's view
that there is a
moderate probability of support from the Thai state
(BBB+/Stable), if necessary.
TMB is systemically important within the domestic financial
sector. It is the
seventh-largest commercial bank with a 4.5% share of loans and
4.8% share of
deposits in the market.
RATING SENSITIVITIES - Support Rating and Support Rating Floor
Any significant changes to the bank's systemic importance -
by market share in assets, loans and deposits - could affect the
the government to support the bank, and hence its Support Rating
Rating Floor. A multiple-notch change to Thailand's IDRs could
also affect the
Support Rating and Support Rating Floor. However, Fitch believes
unlikely to occur in the near term.
The full list of rating actions follows:
Long-Term IDR affirmed at 'BBB-'; Outlook Stable
Short-Term IDR affirmed at 'F3'
USD3.0bn senior unsecured medium-term note programme affirmed at
Viability Rating affirmed at 'bbb-'
Support Rating affirmed at '3'
Support Rating Floor affirmed at 'BB+'
National Long-Term Rating affirmed at 'A+(tha)'; Outlook Stable
National Short-Term Rating affirmed at 'F1(tha)';
National subordinated debt rating affirmed at 'A(tha)'
Ambreesh Srivastava (International Ratings)
+65 6796 7218
Fitch Ratings Singapore Pte Ltd
6 Temasek Boulevard
#35-05 Suntec Tower Four
Trin Siriwutiset (National Ratings)
+662 108 0154
Fitch Ratings (Thailand) Limited
Park Ventures, Level 17
57 Wireless Road, Lumpini
Patumwan, Bangkok 10330
Trin Siriwutiset (International Ratings)
+662 108 0154
Patchara Sarayudh (National Ratings)
+662 108 0152
+852 2263 9901
Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234,
Note to Editors: Fitch's National ratings provide a relative
creditworthiness for rated entities in countries with relatively
international sovereign ratings and where there is demand for
such ratings. The
best risk within a country is rated 'AAA' and other credits are
relative to this risk. National ratings are designed for use
mainly by local
investors in local markets and are signified by the addition of
for the country concerned, such as 'AAA(tha)' for National
ratings in Thailand.
Specific letter grades are not therefore internationally
Additional information is available at www.fitchratings.com.
Applicable criteria, "Global Financial Institutions Rating
Criteria", dated 31
January 2014, "Assessing and Rating Bank Subordinated and Hybrid
dated 31 January 2014, and "National Scale Ratings Criteria",
dated 30 October
2013, are available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
National Scale Ratings Criteria
Assessing and Rating Bank Subordinated and Hybrid Securities
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