Fitch Ratings has affirmed the National Long-Term Rating of Sumitomo Mitsui Trust Bank (Thai) Public Company Limited (SMTBT) at 'AAA(tha)'. The Outlook is Stable. Fitch has also affirmed the National Short-Term Rating at 'F1+(tha)'.
KEY RATING DRIVERS
SMTBT's ratings are driven by its role as a strategically important subsidiary of Japan-based parent, Sumitomo Mitsui Trust Bank, Limited (SMTB, A-/Stable). SMTBT provides a key footprint for the group in Thailand, where it serves the group's Japanese corporate clients. Furthermore, there is a high degree of management control, operational integration and branding linkages between SMTB and its Thai subsidiary. SMTBT commenced operations in 2015, and since then the group has provided important backing in terms of funding and expertise.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
There is no upside to SMTBT's rating, which is at the top end of the Thai national ratings scale.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A decline in prospects for shareholder support could lead to negative rating action on SMTB Thai. For example, a downgrade in SMTB's Long-Term Issuer Default Rating could indicate a reduced ability to support, and lead to similar rating action on SMTBT's National Long-Term Rating.
SMTBT's ratings could also be downgraded if there was a significant reduction in support propensity. For example, this could be indicated by a substantial decline in group linkages, such as a decrease in shareholding of the Thai subsidiary to below 75% with the presence of significant minority shareholders, along with a clear reduction in management control and integration. However, Fitch does not expect any changes in support propensity in the near term.
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 ratings on SMTBT are linked to the credit profile of SMTB.