Bangkok--26 Mar--Fitch Ratings
Fitch Ratings (Thailand) has assigned a National Long-Term rating of 'A(tha)' to TMB Bank Public Company Limited's (TMB; 'A+(tha)'/Stable) unsecured subordinated debentures of up to THB15bn. The debentures mature in 10 years and are to be issued in multiple tranches within 2012. The proceeds will be used to strengthen its Tier 2 capital. The rating of subordinated debentures is consistent with Fitch's approach of rating such performing instruments at one notch below the issuer's National Long-Term Rating, given no loss absorption feature.
Based on the Bank of Thailand's (BOT) guidelines on Basel III compliant capital instruments effective March 2012, Basel III compliant capital instruments without gone-concern absorption features issued within March-December 2012 can still be recognized as capital. However, the amount of capital calculation eligibility of such instruments will decline by 10 percentage points annually, starting from January 2013. While this guideline from BOT could lower TMB's future capital ratios, the impact could be partially offset by the bank's profit accumulation.
TMB's ratings reflect the bank's stand-alone financial strength, with a number of key credit measures remaining weaker compared with similarly rated peers. The ratings also take in to account Fitch's expectation that these differences will continue to narrow. However, should the differences fail to narrow in the near-term, then Fitch may consider negative rating action on its ratings.
TMB is the seventh-largest commercial bank in Thailand with assets of THB718.6bn at end-2011. ING Bank NV (ING; 'A+'/Stable) is the largest shareholder with a 30% stake, followed by the Ministry of Finance at 26% and Singapore's DBS Bank at 2.9%.