Bangkok--7 Nov--Fitch Ratings
Fitch Ratings has affirmed the Export-Import Bank of Thailand's (EXIM) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB+' with Positive Outlook and its National Long-Term Rating at 'AAA(tha)' with Stable Outlook.
A full list of rating actions is at the end of this rating action commentary.
KEY RATING DRIVERS
The rating affirmation reflects Fitch Ratings' view that there is a high probability that the bank would benefit from state support if necessary. EXIM's Issuer Default Ratings (IDRs) and senior debt rating are at the same level as that of the sovereign (BBB+/Positive/F1). The National Long-Term Ratings of EXIM is at 'AAA(tha)', the highest rating on the National Rating scale. This is underpinned by EXIM's important policy roles, its close linkages to the Thai government, and its legal status as a state policy bank set up under specific legislation. EXIM is wholly owned by the Ministry of Finance, and was set up to support the country's import-export sector as well as promote cross-border investment and trade.
EXIM has maintained a consistently sound financial performance, and has not needed extraordinary capital support. Nevertheless, there has been a track record of financial support, such as revenue compensation from implementing government initiatives.
The Positive Outlook on EXIM's Long-Term IDR corresponds to the Positive Outlook on the Thailand's Long-Term Foreign-Currency IDR. The bank's Stable Outlook on its National Long-Term Rating indicates Fitch's expectations that the government's propensity to support the bank is unlikely to reduce in the medium term.
RATING SENSITIVITIES
Any change in Thailand's sovereign rating would likely have an impact on the IDRs, senior debt rating and Support Rating Floor of EXIM. Thailand's Long-Term Foreign-Currency IDR is currently on Positive Outlook, supported by the country's sustained strength of external and public finance. A sovereign rating change is unlikely to affect the bank's National ratings, as the Thai sovereign's default risk would still be considered the lowest in the country. Furthermore, upside to the National ratings is not possible as they are already at the highest level.
Fitch may downgrade EXIM's ratings if the sovereign's propensity to support the bank declines. For example, this could happen if the state materially reduces its shareholding, the bank's policy role is diminished, or if the bank changes its legal status. However, Fitch views such events as unlikely in the medium term.
Additional information is available on www.fitchratings.com