Bangkok--27 Dec--TRIS Rating
TRIS Rating Co., Ltd. has affirmed the ratings of TISCO Bank PLC (TISCO) and its senior debentures at “A” with “stable” outlook. The ratings reflect TISCO’s capable management team, the bank’s good risk management system, its good asset quality, its strong market position in the hire purchase business, and its better diversification of income sources. The ratings take into account TISCO’s benefits as a commercial bank which will provide the bank with higher financial liquidity and flexibility, and long-term opportunities in commercial banking businesses. However, the ratings are partially constrained by uncertain economic factors, uncertainty in the securities industry, intensifying competition in the corporate and retail finance industry and TISCO’s limited branch network compared with other well-established commercial banks.
The “stable” outlook reflects the likelihood that TISCO will deliver a medium-term financial performance as expected, and the commercial banking business platform will benefit the bank in terms of expanded scope of business and financial flexibility and liquidity. The bank’s good risk management system, its proven track record and its strong capital fund will help mitigate future downside risks from uncertain economic and business environment.
TRIS Rating reported that TISCO is ranked twelfth among all 14 Thai universal banks in terms of asset size. With more than 30 years of experience in the industry, TISCO has developed a proficient management team that has enabled the bank to compete in this very competitive industry. The bank’s good risk management system, experienced management team and strong cushion of capital fund and allowance for loan loss against bad debts should mitigate future downside risks. Management has a clear policy to focus on consumer finance businesses and to diversify into fee-based businesses.
TRIS Rating said that TISCO Group’s centralization of business operation and management system benefited the overall group’s business control and cost efficiency. During transition period to settle a universal banking system in the second half of 2005 and in 2006, TISCO faced a slight setback on its financial returns, but this will provide the bank with long-term opportunities in commercial banking businesses. Less favourable economic environment and rising competition in TISCO’s core business, hire purchase, limited its profitability in the first nine months of 2006, but were traded off
with the bank’s market risk mitigation during rising direction of interest rate trend.
TISCO Bank PLC (TISCO)
Company Rating: Affirmed at A
Issue Ratings:
TSCO077A: Bt2,000 million senior debentures due 2007 Affirmed at A
TSCO077B: Bt1,000 million senior debentures due 2007 Affirmed at A
TSCO07OA: Bt1,800 million senior debentures due 2007 Affirmed at A
Rating Outlook: Stable