Bangkok--Dec 17--Moody's Investors Service
Moody's Investors Service revised the outlook for KASIKORNBANK's (KBANK's) D bank financial strength rating (BFSR) to positive from stable. No other ratings were affected - the outlook for KBANK's debt and deposit ratings remain stable. KBANK's Baa1 foreign currency deposit rating is at Thailand's foreign currency country ceiling. Furthermore, the bank's deposit and debt ratings already incorporate systemic support, lifting them above the rating level typically associated with the bank's intrinsic financial strength.
Moody's said the outlook change reflected KBANK's improved economic
capital position. Furthermore, earnings prospects have improved,underpinned by the redemption of the bank's expensive capital-qualifying hybrid securities (SLIPS), and stronger asset growth. Improved earnings will further bolster the bank's capital formation rate, notwithstanding the likelihood of dividend and tax payment resumption.
Moody's said that it would monitor KBANK's 2005 performance before considering whether the BFSR merited an upgrade. First, KBANK must successfully resolve its still substantial legacy problem loans. In addition, Moody's said that it would be scrutinizing KBANK's results to determine if and when the benefits of its stronger balance sheet and large franchise have been translated into sustainable core earnings, as well as the bank's success in diversifiying its earnings base through fee-based income.
KBANK is Thailand's third largest bank. It had total assets of baht 822
billion (US$ 20 billion) on September 30, 2004. The bank is run by the third generation of the founding Lamsam family.
Singapore
Deborah Schuler
VP - Senior Credit Officer
Financial Institutions Group
Moody's Singapore Pte Ltd.
Telephone: 65-6398-8300
Facsimile: 65-6398-8301
Singapore
Beatrice Woo
Vice President - Senior Analyst
Financial Institutions Group
Moody's Singapore Pte Ltd.
Telephone: 65-6398-8300
Facsimile: 65-6398-8301
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