Bangkok--12 Nov--Fitch Ratings
Fitch Ratings (Thailand) has assigned Bangkok Bank Public Company Limited's (BBL; 'AA(tha)'/Stable) upcoming unsecured subordinated debentures of up to THB20bn, with an option to issue a further amount of up to THB10bn, a National Long-Term rating of 'AA-(tha)'. The debentures will have a maturity of 10 years but are callable after five years. The proceeds will be used for the bank's general corporate purposes.
The subordinated debentures are rated one notch below BBL's National Long-Term Rating to reflect their subordination in the capital structure and are in line with Fitch's approach to rate such subordinated debt instruments. BBL's ratings are underpinned by its sound capital and profitability, strengthened asset quality and reserves as well as its strong domestic franchise. Fitch believes the bank's overall financial position is sufficiently robust to absorb considerable credit stress. This is reflected in the Stable Outlook.
Positive rating action may result from sustained significant improvements in profitability and asset quality, while maintaining strong levels of capital. However, this is unlikely in the near term, given the rising risk of a weakening operating environment. Conversely, a downgrade of the rating may result from a sustained increase in loan concentration or rapid growth leading to material deterioration in asset quality or a weaker liquidity profile.
Established in 1944, BBL is Thailand's largest commercial bank by consolidated assets with an 18% share of loans and a 20% share of deposits at end-June 2012. It has a strong business franchise in large corporates and SMEs and continues to expand into retail lending. BBL has 1,095 domestic and 25 offshore branches in 13 economies, mainly in Asia.