Singapore, July 05, 2018 -- Moody's Investors Service has today assigned Counterparty Risk Ratings
to 11 banks in Thailand.
The 11 rated banks are: 1) Bangkok Bank Public Company Limited (BBL),
2) Bank of Ayudhya (BAY), 3) CIMB Thai Bank Public Company Limited
(CIMBT), 4) Export-Import Bank of Thailand (EXIMT),
5) Government Housing Bank of Thailand (GHB), 6) KASIKORNBANK Public
Company Limited (KBank), 7) Krung Thai Bank Public Company Limited
(KTB), 8) Siam Commercial Bank Public Company Limited (SCB),
9) Standard Chartered Bank (Thai) Public Co Ltd (SCBT), 10) TMB
Bank Public Company Limited (TMB), and 11) United Overseas Bank
(Thai) Public Co Ltd (UOBT).
Moody's Counterparty Risk Ratings are opinions of the ability of
entities to honour the uncollateralized portion of non-debt counterparty
financial liabilities (CRR liabilities) and also reflect the expected
financial losses in the event such liabilities are not honoured.
CRR liabilities typically relate to transactions with unrelated parties.
Examples of CRR liabilities include the uncollateralized portion of payables
arising from derivatives transactions and the uncollateralized portion
of liabilities under sale and repurchase agreements. CRRs are not
applicable to funding commitments or other obligations associated with
covered bonds, letters of credit, guarantees, servicer
and trustee obligations, and other similar obligations that arise
from a bank performing its essential operating functions.
RATINGS RATIONALE
Moody's says that the CRRs assigned to the 11 banks are in line
with the Counterparty Risk Assessments (CR Assessment) already assigned.
Because Moody's considers Thailand not to have an operational resolution
regime, in assigning CRRs to the banks subject to this rating action,
the rating agency applies its basic Loss Given Failure (LGF) approach.
Moody's basic LGF analysis positions CRRs in line with the bank's
CRA, one notch above the adjusted BCAs.
Furthermore, the CRR also incorporates between zero to four notches
of uplift due to government support, also in line with that applied
to the CRA, given Moody's expectation government support.
This reflects the banks' systemic importance to Thailand.
RATING OUTLOOK
CRRs do not carry outlooks.
WHAT COULD CHANGE THE RATING UP/DOWN
BANGKOK BANK - WHAT COULD CHANGE THE RATING UP
The long term ratings of BBL are already at the level of Thailand's
Baa1 sovereign rating. As such, the bank's rating could
be upgraded if the sovereign rating is upgraded.
The BCA of BBL could be upgraded if the bank demonstrates an improvement
in its asset-quality performance, supported by continued
strengthening of its loss-absorbing buffers (including both loan-loss
reserves and capital), as well as funding and liquidity.
BANGKOK BANK - WHAT COULD CHANGE THE RATING DOWN
The long term ratings of BBL could be downgraded if the sovereign rating
is downgraded.
The long term ratings of BBL could be downgraded if its BCA is downgraded
due to a significant deterioration in the bank's financial fundamentals.
If all other rating factors are constant, the BCA would come under
adverse pressure if the bank reports significantly increased problem loan
ratios or significantly reduced profitability.
BANK OF AYUDHYA - WHAT COULD CHANGE THE RATING UP
The long term ratings of BAY could be upgraded if the sovereign rating
is upgraded.
BAY's BCA could be upgraded if the bank maintains its stable asset-quality
performance and further improves its capitalization, and funding
and liquidity. An upgrade of the standalone credit profile of its
majority shareholder, MUFG, could also lead to an upgrade
of its foreign-currency deposit rating.
BANK OF AYUDHYA - WHAT COULD CHANGE THE RATING DOWN
The long term ratings of BAY could be downgraded if its BCA is downgraded
due to a significant deterioration in the bank's financial fundamentals.
If all other rating factors are constant, the BCA would come under
adverse pressure if the bank reports significantly increased problem loan
ratios or significantly reduced profitability.
The BCA of BAY could be downgraded if its financial fundamentals deteriorate
significantly. If all other rating factors are constant,
the BCA would come under downward pressure if the bank reports a significantly
increased problem loan ratio or a significantly reduced profitability
level.
CIMB THAI BANK - WHAT COULD CHANGE THE RATING UP
The long term ratings of CIMB Thai could be upgraded if the bank's Adjusted
BCA is upgraded, as reflected by a stabilization in its asset quality
performance, supported by maintenance of sufficient loss-absorbing
buffers, and an improvement in its profitability profile.
CIMB THAI BANK - WHAT COULD CHANGE THE RATING DOWN
The long term ratings of CIMBT could be downgraded if its BCA is downgraded
due to a deterioration in its financial fundamentals. If all other
rating factors are constant, the BCA would come under adverse pressure
if the bank reports significantly increased problem loan ratio or significantly
reduced profitability.
In addition, a downgrade of its parent's BCA could also lead
to a downgrade of its adjusted BCA and rating.
EXPORT-IMPORT BANK OF THAILAND - WHAT COULD CHANGE THE RATING
UP
EXIMT's long term ratings are aligned with that of the Thai government
owing to the bank's important policy role. Therefore, the
bank's rating will likely move in line with the rating of the Thai government.
Furthermore, the bank's BCA may be upgraded if its standalone creditworthiness
improves, as demonstrated by (1) a consistent improvement in its
asset-quality metrics, (2) an improvement in core profitability,
and (3) stable capitalization.
EXPORT-IMPORT BANK OF THAILAND - WHAT COULD CHANGE THE RATING
DOWN
EXIMT's long term ratings could be downgraded if the sovereign's creditworthiness
deteriorates or if the bank's operating environment deteriorates materially,
resulting in a worsening of the bank's standalone creditworthiness.
Specific downgrade triggers are (1) diminishing strategic importance owing
to changes in the bank's policy role or a weakening in the bank's relationship
with the government, such that strong government support is no longer
assured; (2) a material deterioration in the credit risk of export-oriented
borrowers or other categories of borrowers in which the bank has concentrated
exposures; and (3) a material rise in the bank's nonperforming assets
without a commensurate increase in loan-loss reserves or capital,
such that its nonperforming assets (as a percentage of shareholders' equity
and loan-loss reserves) rise significantly.
GOVERNMENT HOUSING BANK OF THAILAND - WHAT COULD CHANGE THE RATING
UP
GHB's long term ratings could be upgraded if the sovereign rating is upgraded.
In addition, we could raise the BCA if there is a material improvement
in the bank's standalone creditworthiness supported by a stable and predictable
operating environment.
GOVERNMENT HOUSING BANK OF THAILAND - WHAT COULD CHANGE THE RATING
DOWN
GHB's long term ratings could be downgraded if (1) the sovereign's creditworthiness
deteriorates; or (2) the operating environment deteriorates materially,
resulting in a lowering of the bank's BCA.
Quantitatively, the downgrade triggers are (1) developments in the
residential property sector that could exert undue stress on GHB's asset
quality, earnings and capital, (2) an increase in the bank's
non-performing loans (NPLs) without a corresponding increase in
loan-loss provisions, and (3) any signs on shifting from
its policy mandate which may reduce the probability of support from the
Thai government.
KASIKORNBANK - WHAT COULD CHANGE THE RATING UP
The long term ratings of KBank are already at the level of Thailand's
sovereign rating of Baa1. As such, the bank's rating
could be upgraded if the sovereign rating is upgraded.
The BCA of KBank could be upgraded if the bank demonstrates an improvement
in its asset-quality performance, supported by continued
strength in its loss-absorbing buffers (including both loan-loss
reserves and capital), as well as funding and liquidity.
KASIKORNBANK - WHAT COULD CHANGE THE RATING DOWN
The long term ratings of KBank could be downgraded if the sovereign rating
is downgraded.
The long term ratings of KBank could be downgraded if its BCA is downgraded
due to a significant deterioration in the bank's financial fundamentals.
If all other rating factors are constant, the BCA would come under
adverse pressure if the bank reports significantly increased problem loan
ratios or significantly reduced profitability.
KRUNG THAI BANK - WHAT COULD CHANGE THE RATING UP
KTB's long term ratings could be upgraded if the sovereign rating
is upgraded, given the strong relationship between the bank and
the Thai government.
KTB's BCA could be upgraded if the bank demonstrates an improvement
in its asset quality, supported by continued strength in its loss-absorbing
buffers (including both loan-loss reserves and capital),
as well as funding and liquidity. Specifically, the following
triggers would result in an upward revision of the bank's BCA:
-- Stabilization of the bank's asset quality, as represented
by a lower new nonperforming loan (NPL) formation rate and supported by
a higher level of provisioning
-- An improvement in the bank's capital generation capacity
so as to allow for the maintenance of an adequate capital buffer against
credit losses, with its Tier 1 capital ratio sustained at the current
levels
KRUNG THAI BANK - WHAT COULD CHANGE THE RATING DOWN
KTB's long term ratings could be downgraded if Thailand's
sovereign rating is downgraded. Specifically, the triggers
for a downgrade are:
-- A significant weakening in the operating environment or a loosening
of underwriting practices, which would pose asset-quality
risks
-- Lower risk-adjusted profitability, as measured by
declining net income as a percentage of average risk-weighted assets
(RWA)
-- A decline in the bank's Common Equity Tier 1 (CET1) capital
ratio below the current levels
-- Any sign of a weaker, more distant, relationship with
the government
SIAM COMMERCIAL BANK - WHAT COULD CHANGE THE RATING UP
SCB's long term ratings are already at the level of Thailand's
sovereign rating of Baa1 stable. As such, the bank's
ratings could be upgraded if the sovereign rating is upgraded.
The BCA of SCB could be upgraded if the bank demonstrates an improvement
in its asset-quality performance, supported by continued
strength in its loss-absorbing buffers (including both loan-loss
reserves and capital), as well as funding and liquidity.
SIAM COMMERCIAL BANK - WHAT COULD CHANGE THE RATING DOWN
SCB's long term ratings could be downgraded if the sovereign rating
is downgraded.
The BCA of the bank could be downgraded if its financial fundamentals
deteriorate significantly. If all other rating factors are constant,
the BCA would come under downward pressure if the bank reports a significantly
increased problem loan ratio or a significantly reduced profitability
level. A decline in the bank's Tier 1 ratio below double-digit
levels in percentage terms would also be negative for its BCA.
STANDARD CHARTERED BANK (THAI) - WHAT COULD CHANGE THE RATING UP
The long term ratings of SCBT could be upgraded if its BCA is upgraded,
as reflected by stable asset quality performance, supported by the
maintenance of sufficient loss-absorbing buffers, and an
improvement in its profitability.
An upgrade of the BCA of SCBT's parent, Standard Chartered Bank,
could also lead to an upgrade of the bank's ratings.
STANDARD CHARTERED BANK (THAI) - WHAT COULD CHANGE THE RATING DOWN
A downgrade of Standard Chartered Bank's BCA would exert downward
pressure on SCBT's Adjusted BCA and long-term ratings. A
lowering of our assumption of support from the Standard Chartered Bank
Group would also lead to a downgrade of the bank's long term ratings.
The long term ratings of SCBT could be downgraded if its BCA is downgraded
because of a deterioration in its financial fundamentals.
If all other rating factors are constant, the BCA would come under
adverse pressure if the bank reports a significantly increased problem
loan ratio or significantly reduced profitability.
Specific triggers for a downgrade are:
-- a deterioration in credit quality, such that the bank's
gross impaired loans as a percentage of loan-loss reserves and
shareholders' equity increase steadily
-- a reduction in SCBT's loss-absorption capacity, as
a result of aggressive credit growth or rising credit costs, or
because of the repatriation of capital to the Standard Chartered Bank
Group, resulting in SCBT's CET1 capital ratio falling below the
system average
TMB BANK - WHAT COULD CHANGE THE RATING UP
TMB's long term ratings could be upgraded if its BCA is upgraded,
as reflected by an improvement in its asset quality performance,
supported by the maintenance of sufficient loss-absorbing buffers,
and an improvement in its profitability. .
TMB BANK - WHAT COULD CHANGE THE RATING DOWN
TMB's long term ratings could be downgraded if its BCA is downgraded owing
to a significant deterioration in its financial fundamentals.
If all other rating factors are constant, the BCA will be strained
if the bank reports significantly increased problem loan ratios or materially
lower profitability.
UOB THAI - WHAT COULD CHANGE THE RATING UP
UOBT's long term ratings could be upgraded if the sovereign rating is
upgraded.
UOBT's BCA and Adjusted BCA could be upgraded if the bank's credit
profile improves, with a stabilization in asset-quality performance,
and it further improves its capitalization and loan-loss reserves,
supported by its stable funding and liquidity position.
UOB THAI - WHAT COULD CHANGE THE RATING DOWN
UOBT's long term ratings could be downgraded if the sovereign rating is
downgraded. In addition, a downgrade of its parent's
BCA could also lead to a downgrade of its Adjusted BCA and rating.
UOBT's BCA could be downgraded if its financial fundamentals deteriorate
significantly. If all other rating factors are constant,
the BCA would come under adverse pressure if the bank reports a significantly
increased problem loan ratio or a material decline in profitability.
LIST OF ASSIGNED RATINGS
Bangkok Bank Public Company Limited:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Bangkok Bank Public Company Ltd. (Hong Kong):
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Bank of Ayudhya:
Local currency long-term Counterparty Risk Rating
of A3 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of A3 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
CIMB Thai Bank Public Company Limited:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Export-Import Bank of Thailand:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Government Housing Bank of Thailand:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
KASIKORNBANK Public Company Limited:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
KASIKORNBANK Public Co. Ltd (Hong Kong):
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
KASIKORNBANK Public Co. Ltd. (CI)
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Krung Thai Bank Public Company Limited:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Krung Thai Bank Public Co Ltd, Cayman Branch
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Krung Thai Bank Public Co. Ltd.,Singapore Br.:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Siam Commercial Bank Public Company Limited:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Siam Commercial Bank Public Co. (Cayman)
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Siam Commercial Bank Public Co. (Hong Kong):
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Standard Chartered Bank (Thai) Public Co Ltd:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
TMB Bank Public Company Limited:
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
TMB Bank Public Co. Ltd (Cayman Islands):
Local currency long-term Counterparty Risk Rating
of Baa1 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of Baa1 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
United Overseas Bank (Thai) Public Co Ltd:
Local currency long-term Counterparty Risk Rating
of A3 is assigned
Local currency short-term Counterparty Risk Rating
of Prime-2 is assigned
Foreign currency long-term Counterparty Risk Rating
of A3 is assigned
Foreign currency short-term Counterparty Risk
Rating of Prime-2 is assigned
Bangkok Bank Public Company Limited (BBL), headquartered in Bangkok,
reported total assets of THB3,174 billion ($102 billion)
as of 31 March 2018.
Bank of Ayudhya (BAY), headquartered in Bangkok, reported
total assets of THB2,160 billion ($69 billion) as of 31 March
2018.
CIMB Thai Bank Public Company Limited (CIMBT), headquartered in
Bangkok, reported total assets of THB313 billion ($10 billion)
as of 31 March 2018.
Export-Import Bank of Thailand (EXIMT), headquartered in
Bangkok, reported total assets of THB91 billion ($3 billion)
as of 31 December 2017.
Government Housing Bank of Thailand (GHB), headquartered in Bangkok,
reported total assets of THB1,062 billion ($33 billion) as
of 31 March 2018.
KASIKORNBANK Public Company Limited (KBank), headquartered in Bangkok,
reported total assets of THB2,994 billion ($96 billion) as
of 31 March 2018.
Krung Thai Bank Public Company Limited (KTB), headquartered in Bangkok,
reported total assets of THB2,888 billion ($93 billion) as
of 31 March 2018.
Siam Commercial Bank Public Company Limited (SCB), headquartered
in Bangkok, reported total assets of THB3,055 billion ($98
billion) as of 31 March 2018.
Standard Chartered Bank (Thai) Public Co Ltd (SCBT), headquartered
in Bangkok, reported total assets of THB178 billion ($6 billion)
as of 31 March 2018.
TMB Bank Public Company Limited (TMB), headquartered in Bangkok,
reported total assets of THB829 billion ($27 billion) as of 31
March 2018.
United Overseas Bank (Thai) Public Co Ltd (UOBT), headquartered
in Bangkok, reported total assets of THB527 billion ($17
billion) as of 31 March 2018.
The principal methodology used in these ratings was Banks published in
June 2018. Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Alka Anbarasu
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Graeme Knowd
MD - Banking
Financial Institutions Group
JOURNALISTS: 81 3 5408 4110
Client Service: 81 3 5408 4100
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
