Bangkok--26 Jun--Fitch Ratings
Fitch Ratings has assigned a National Short-Term Rating of 'F1+(tha)' to Siam Commercial Bank Public Company Limited's (SCB) unsubordinated unsecured short-term debenture programme of up to THB50bn.
This programme will replace SCB's existing THB50bn short-term debenture programme, which expires on 15 July 2014. Debentures issued under the programme will have a maturity of no more than 270 days, and can be issued in several tranches within the year. Proceeds from the issuance would be used for the bank's general corporate purposes.
KEY RATING DRIVERS
The programme is rated at the same level as SCB's National Short-Term Rating of 'F1+(tha)', as the debentures issued under the programme will constitute direct unsubordinated and unsecured obligations of the bank.
SCB's ratings reflect its sound domestic franchise, particularly in retail banking and good performance, with consistent profitability. SCB has grown relatively quickly in recent years, but at the same time it has maintained acceptable levels of capital (with a consolidated Tier 1 ratio of 12.0%) and improved its asset quality buffers (as seen by strong loan loss reserve coverage of 148%.
RATING SENSITIVITIES
Any change in SCB's National Short-Term Ratings will affect the rating of the unsubordinated unsecured debentures. The National Short-Term Ratings are already at the top end of the scale, and hence, there is no upside. A downgrade may come from a very significant deterioration in asset quality and capital. However, we do not expect any such changes in the near term, as current buffers appear adequate to cope with a normal economic downturn.
The other ratings of SCB are unaffected and are as follows:
Long-Term Foreign Currency IDR: 'BBB+'; Outlook Stable
Short-Term Foreign Currency IDR: 'F2'
Viability Rating: 'bbb+'
Support Rating: '2'
Support Rating Floor: 'BBB-'
National long-term rating: 'AA(tha)'; Outlook Stable
National short-Term rating: 'F1+(tha)'
Senior unsecured USD3.5bn MTN programme: 'BBB+'
Long-term foreign currency senior unsecured debt: 'BBB+'
National rating on long-term subordinated debt: 'AA-(tha)'