Bangkok--21 Jun--TRIS Rating
TRIS Rating Co., Ltd. has affirmed the company rating of Siam City Bank PLC (SCIB) at “A+” with “positive” outlook. At the same time, TRIS Rating has cancelled the rating of SCIB’s subordinated debentures of Bt10,000 million (SCIB196A) due to the early redemption of the debentures under the Entire Business Transfer Program between SCIB and Thanachart Bank PLC (TBANK). The effective date of the debenture redemption was due on 20 June 2011.
TRIS Rating reported that the company rating of SCIB reflects the enhancement from SCIB’s stand-alone rating as the bank is a core subsidiary of the parent bank, TBANK, which is rated “A+” with “positive” outlook by TRIS Rating. SCIB’s stand-alone rating reflects the management team’s ability to run a medium-sized bank with a nationwide branch network, high liquidity, good liquidity risk management, strong deposit base, and sufficient capital funds to absorb certain amount of losses from unexpected downside risks. The rating also takes into consideration deteriorating asset quality, following an anticipated rise in non-performing loans (NPL). In addition, the rating reflects uncertainty from the business integration between SCIB and TBANK, which might limit business growth and profitability during the merging period.
The “positive” outlook reflects SCIB’s role as the core business of TBANK. The outlook also takes into account the expectation that SCIB will be able to leverage TBANK’s strengths in controlling asset quality deterioration as well as transition risk during the merger integration period. The bank’s good liquidity risk management system, experienced management team, and sufficient capital fund will help mitigate future downside risks.
TRIS Rating said it will withdraw the company rating of SCIB after the merger between SCIB and TBANK is complete.
Siam City Bank PLC (SCIB)
Company Rating: Affirmed at A+
Rating Outlook: Positive