Bangkok--3 Apr--Fitch Ratings
Fitch Ratings (Thailand) has assigned Yuanta Securities (Thailand) Company Limited (YSTH) a National Long-Term Rating of 'AA(tha)' with a Stable Outlook and a National Short-Term Rating of 'F1+(tha)'.
KEY RATING DRIVERS
NATIONAL RATINGS
YSTH's ratings are driven by institutional support. Fitch assesses YSTH as a strategically important subsidiary of Yuanta Financial Holding Co., Ltd. (YFHC; BBB+/Stable). The group has completely owned its Thai subsidiary since July 2016, after acquiring what was then KKTRADE Securities Company Limited from Phatra Capital Public Company Limited. The parent allows YSTH to share its brand and has committed itself to its Thai subsidiary operationally and financially, providing funding and new capital. The group also exercises management control over YSTH and has started integrating it with the group.
Fitch believes YSTH plays an important role in the group's wider growth strategy in south-east Asia and will benefit from its parent's regional franchise over the long term. YSTH is poised to transform itself under its new leadership from an exclusively retail broker to a full-service securities firm. YSTH's franchise will mostly likely strengthen through close collaboration with the group and synergies with its parent.
RATING SENSITIVITIES
NATIONAL RATINGS
Any changes in YFHC's Long-Term Foreign-Currency IDR may lead to changes in YSTH's National Ratings, which are also sensitive to changes in Thailand's Long-Term Local-Currency IDR of 'BBB+' with Stable Outlook.
The agency may downgrade YSTH's National Ratings if YFHC lowers its propensity to provide extraordinary support to its subsidiary, either by significantly reducing its shareholding or financial commitment. The agency views this to be unlikely in the near term due to the group's recent entry into the Thai market in 2016.