Bangkok--6 Dec--Fitch Ratings Fitch Ratings has today affirmed the Support ratings of Thailand's Bank of Agriculture and Agricultural Cooperatives (BAAC), Government Housing Bank (GHB) and Government Savings Bank (GSB) at '2'; all three are state-owned financial institutions. Given these banks' government ownership and public policy roles, Fitch believes there is a high probability that state support would be forthcoming, if necessary. Any change in the level of government ownership or support could affect the support ratings of these banks. BAAC's main objective is to provide financial assistance to farmers and agricultural cooperatives. The Ministry of Finance (MOF) holds 99% of BAAC's shares (and 100% of GHB and GSB). BAAC has a large rural-based network of 900 branches. It reported strong loan growth in recent years, but also faces higher provisioning and funding costs. Loans in arrears were about 6% of total loans at end-March 2007, although the level of actual impaired loans may be significantly higher on a stricter reporting basis. GHB is the largest provider of mortgage finance to mainly low-to-middle income borrowers in Thailand, with a current market share of over 35%. GHB's net interest margins fell in 2006 due to competition on loan rates, as well as higher funding costs, although performance is expected to improve in 2007. Impaired loans, while falling due to the sale of THB8 billion in bad loans, remained relatively high at about 10% of total loans at end-2006. Securitisation could assist GHB strengthen capital ratios in 2008, otherwise further capital may be required for growth. GSB's main objective is to mobilise and promote domestic savings, provide lower-income borrowers access to home finance and small-sized Thai companies access to business loans. GSB has also reported strong growth in recent years and similarly was affected by higher provisioning costs in 2006. GSB's capital base appears the strongest of the three major policy banks. Contacts: Vincent Milton, Bangkok, +66 2 655 4759; David Marshall, Hong Kong +852 2263 9911. Media Relations: Shivani Sundralingam, Singapore, Tel: + 65 6796 7215. Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. 101 Finsbury Pavement, London, EC2A 1RS