Bangkok--Jun 15--Moody's Investors Service
Moody's Investors Service has upgraded Siam Commercial Bank Public Company Limited's (SCB) bank financial strength rating (BFSR) to D+ from D, concluding the review announced on March 18, 2005. The rating outlook is stable.
The bank's debt and deposit ratings were not included in the review.
SCB's Baa1 foreign currency deposit rating is at Thailand's foreign currency country ceiling. Furthermore, its deposit and debt ratings already incorporate government support, lifting them above the rating level typically associated with SCB's intrinsic financial strength.
Moody's says the upgrade recognizes SCB's successful restoration of its
core earnings and capital adequacy after the shocks of the past several years. The bank's first-quarter results further demonstrated its success in maintaining and expanding its franchise in Thailand's increasingly competitive marketplace.
Moody's believes that SCB's expansion of its consumer banking business,
which now accounts for 33% of its good loans as well as 42% of its total revenues (excluding gains on investments), permanently enhances both its earnings potential and risk diversification.
While SCB's still bears a legacy of crisis-related impaired assets,
Moody's believes that the bank's capital and loan loss reserves more than adequately cover likely losses. Furthermore, despite the rapid growth of its consumer credit portfolio, Moody's is satisfied that it is taking reasonable care in the area of credit underwriting.
The stable outlook on this rating incorporates the rating agency's
expectation that SCB will dividend out as much as 35-40% of its net income, but not substantially more.
Headquartered in Bangkok, SCB is Thailand's fourth largest bank, with
total assets of baht 795 billion (US$20 billion) on March 31, 2005.
The ratings affected are:
Siam Commercial Bank Public Company Limited -- Bank financial strength
rating upgraded to D+ from D. The rating outlook is stable.
The ratings not affected are:
Siam Commercial Bank Public Company Limited -- Foreign currency deposit
ratings of Baa1 and Prime-2. The rating outlook is stable.
Siam Commercial Bank Public Company Limited (Singapore) -- Foreign
currency subordinated debt of Baa2. The rating outlook is stable.
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 End.