Bangkok--28 Feb--Fitch Ratings
Fitch Ratings (Thailand) has assigned a National Long-Term rating of 'AA(tha)' to Krung Thai Bank Public Company Limited's (KTB; 'AA+(tha)'/Outlook Stable) unsecured subordinated debentures of up to THB10bn. The debentures mature in 10 years, and KTB has an option to issue up to a further THB10bn debentures. The proceeds will be used for liquidity management and to strengthen Tier 2 capital. KTB's issuer rating is based on Fitch's expectation of state support due to the strong linkages through ownership, control and evidence of support. The rating of KTB's subordinated debentures, at one notch below the bank's issuer rating, takes into account Fitch's view that state support could be extended to these debt instruments.
KTB is Thailand's second-largest bank with about a 17% market share in system assets as of end-December 2011. Its major shareholder, with a 55% stake, is Financial Institutions Development Fund, a unit under the Bank of Thailand. Notwithstanding the current ownership stake, Fitch believes there is a high probability that KTB would receive state support if needed, due to its size and importance to the financial system and economy.