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Jan 24 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings (Thailand) Limited has affirmed KTB Leasing Company Limitedas (KTBL) National Long-Term and Short-Term Ratings at a€˜AA-(tha)a and a€˜F1+(tha)a respectively. The Outlook is Stable.
The rating reflects Fitchas view that there is a high probability that KTBLas sole direct shareholder, Krung Thai Bank Public Company Limited (KTB; AA+(tha)/Stable), would provide extraordinary support to its subsidiary, if required. KTB is the second-largest commercial bank in Thailand by assets, and is also the only commercial bank that is majority owned by the government.
Fitch considers KTBL to be of strategic importance to KTB. KTBL shares KTBas name and logo, and is KTBas only wholly owned leasing subsidiary with operations in auto hire purchase, financial leases, and operating leases. The company also relies on borrowings from KTB to support the majority of its funding requirements. Fitch believes KTB has no intention to reduce its stake in KTBL in the foreseeable future.
KTBLas National Long-Term Rating is notched two levels below KTBas National Short-Term Rating. This differential reflects a central bank regulation that constrains the amount of financial support that KTB can provide to KTBL. KTBas aggregate exposures to affiliates outside of its a€˜solo consolidation groupa are capped at 25% of its capital funds. KTBL does not qualify as part of KTBas solo consolidation group due to its operating lease business, and hence KTBas funding to KTBL faces this limit.
Given the support-driven ratings of KTBL, any changes in KTBas ratings would affect the ratings. A significant reduction in KTBas ownership of the company, or any other signs of reduced importance of KTBL to KTB, would have a negative impact on the companyas ratings.
Meanwhile, any regulatory changes or a restructuring of KTBL that would allow the company to be included in KTBas solo consolidation group could have a positive impact on the ratings.
The list of rating actions is as follows:
National Long-Term Rating affirmed at a€˜AA-(tha)a; Stable Outlook
National Short-Term Rating affirmed at a€˜F1+(tha)a