Bangkok--14 May--Fitch Ratings
Fitch Ratings (Thailand) has affirmed the national long-term ratings on Sumitomo Mitsui Banking Corporation, Bangkok Branch's (SMBC Bangkok Branch) Thai baht-denominated senior unsecured notes at 'AAA(tha)'.
KEY RATING DRIVERS
The affirmation reflects Fitch's assessment of SMBC's credit strength relative to other rated entities on the Thai national ratings scale.
The note rating is based on the Long-Term Foreign-Currency Issuer Default Rating (IDR) of the Japan-based parent, Sumitomo Mitsui Banking Corporation (SMBC, A/Negative/a), which is higher than Thailand's Country Ceiling of 'A-' and Thailand's Long-Term Local-Currency IDR of 'BBB+'. The Negative Outlook on SMBC reflects the downside risk from the coronavirus pandemic, but we do not expect this to affect our view of SMBC Bangkok Branch's relative strength on the Thai national scale in the near term.
For additional information on SMBC, please see, Coronavirus Drives Negative Rating Actions on Japanese Banks as Economic Shock Hits, dated 13 April 2020, at www.fitchratings.com/site/pr/10118168
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
The issue rating is at the highest point on Thailand's national rating scale, hence, there is no upside.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The note rating could be downgraded if Fitch re-assesses SMBC's relative credit profile compared with other rated entities in Thailand; for example, if SMBC's Long-Term Foreign-Currency IDR was to be below Thailand's Long-Term Local-Currency IDR, either by a downgrade of SMBC or an upgrade of Thailand.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The national long-term rating of the Thai baht-denominated senior-unsecured notes is based on SMBC's credit profile.
Additional information is available on www.fitchratings.com