Bangkok--5 Nov--Fitch Ratings
Fitch Ratings (Thailand) has assigned Bank of China (Thai) Public Company Limited (BOCT) a National Long-Term Rating of ‘AAA(tha)’, with a Stable Outlook. The National Short-Term Rating is assigned at ‘F1+(tha)’.
KEY RATING DRIVERS
BOCT’s rating is based on Fitch’s expectation of a high probability of institutional support from its parent, Bank of China Limited (BOC; A/Stable).
Fitch considers BOCT to be a strategically important subsidiary of the BOC group due to its role in supporting BOC’s franchise in southeast Asia, high levels of operational integration between the two, financial support from BOC in the past and BOC’s near-full ownership of BOCT. BOCT shares the same branding with its parent and any material negative development at the bank, such as a default, would lead to reputational risk for the BOC group.
BOC transferred the entire business of its Bangkok branch to the newly set up BOCT in August 2014. BOCT’s portfolio is concentrated in the corporate sector, focusing on loans and trade finance, particularly between Thailand and China. BOCT is still relatively small in Thailand with market share of loans and deposits at around 0.2% and 0.1% respectively.
The Outlook is Stable, as Fitch does not expect any material change to the group’s propensity to support BOCT in the near future.
RATING SENSITIVITIES
As the ratings are based on institutional support, they could be impacted by any changes in its parent’s ratings.
Any changes in the BOC group’s propensity to support BOCT could also lead to rating action. For example, any signs of a reduced importance of BOCT to the group, such as via a reduction in the group’s shareholding or a reversal of integration measures, could lead to a downgrade. However, Fitch does not expect such changes to occur in the short to medium term.
There is no upside to the ratings as they are already at the highest level on the National Ratings scale.