Bangkok--Jun 21--Moody's
Moody's assigned Standard Chartered Nakornthon Bank (SCNB) A3/Prime-1 local currency deposit and issuer ratings and upgraded its bank financial strength rating (BFSR) to D+ from D, on SCNB's upcoming combination with Standard Chartered Bank PLC's Bangkok branch. SCNB's foreign currency deposit ratings of Baa1/Prime-2, which are constrained by the country's foreign currency ceilings, were affirmed. The rating outlook is stable.
Moody's said the upgrade anticipates the beneficial effects of the planned October 2005 integration of Standard Chartered Bank's (SCB) Bangkok branch into SCNB. The rating agency said that it judged the combination highly likely, given that the key Ministry of Finance and Bank of Thailand approvals have already been received, although there are certain associated regulatory and shareholder approvals still outstanding.
The A3/Prime-1 local currency issuer and deposit ratings reflect the high level of support that Moody's believes would be available from its parent, A2-rated Standard Chartered Bank PLC, to protect SCNB's liability holders, should it be needed. After the merger, SCNB will be renamed (probably, as Standard Chartered Bank (Thai) Public Company Limited subject to regulatory and shareholder approval), and will be the Standard Chartered group's only deposit taking entity operating in Thailand. Its Thai operations are an integral part of SCB's global strategy.
Moody's said it upgraded SCNB's BFSR to D+ to reflect the enlarged and
better diversified mix of revenue and loans that will be achieved by the combination with SCB's Bangkok branch. The bank will increase significantly in size, but remain among the system's smallest. The merger will bring together SCNB's retail and SME businesses with the branch's commercial and treasury businesses.
Furthermore, Moody's expects SCNB's already strong PPP (pre-tax pre-provision profits) will be more evident on its bottom line, as the bank's contract with the FIDF managing Nakornthon's historic NPLs is wrapped up.
These rating outcomes are based on assumptions provided to Moody's by
Standard Chartered, and our understanding that the assets and liabilities in Standard Chartered Bank's Bangkok branch, along with sufficient capital to achieve a minimum 9% total capital adequacy ratio, will be transferred into SCNB on or near October 2005. To the extent that these factors alter materially, Moody's ratings conclusions may differ from those outlined above.
SCNB is over 99% owned by UK-headquartered Standard Chartered Bank. SCNB
is headquartered in Bangkok and had total assets of THB 64 bn (US$ 1.6bn) on December 31, 2004.
New ratings assigned are:
Long-term/short-term foreign currency issuer ratings of Baa1/Prime-2
Long-term/short-term local currency issuer ratings of A3/Prime-1
Long-term/short-term local currency deposit ratings of A3/Prime-1
The ratings affected are:
Bank financial strength rating upgraded to D+ from D.
The ratings not affected are:
Long-term/short-term foreign currency deposit ratings of Baa1/Prime-2
Foreign currency subordinated debt rating of Baa2.
All rating outlooks are 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.