Bangkok--6 Dec--Fitch Ratings Fitch has today affirmed the following ratings of Thailand’s Siam City Bank (SCIB): Long-term foreign currency Issuer Default rating (IDR) at ‘BB’, Short-term foreign currency rating at ‘B’, National long-term rating at ‘A-(tha)’ (A minus(tha)), National Short-term rating at ‘F1(tha)’, Individual rating at ‘D’, Support rating at ‘4’ and Support Rating Floor at ‘B+’. The Outlook on the ratings is Stable. The ratings of SCIB are affirmed, notwithstanding further asset quality deterioration over the past year. In 9M07, SCIB reported a moderate net loss of THB3.4 billion, affected by a large loan loss provision of THB6.8bn. Due in part to stricter classification, as well as underlying deterioration in its portfolio, SCIB’s impaired loans rose significantly to THB21.0bn or 8.6% of total loans at end-September 2007 (end-2006: THB13.0bn or 5.6%). SCIB’s loan loss reserve coverage is in line with its peer group, at over 70% of impaired loans. Future asset quality trends depend on an expected rebound in the Thai economy in 2008, as well as improved standards in credit origination and collections. At any rate, the bank’s capital position still appears strong, with a Tier 1 capital ratio of 13.2% of risk-weighted assets at end-September 2007. The Outlook on the ratings is Stable given SCIB’s relatively strong capital base which provides the bank some buffer in withstanding the weak operating environment. A clearer longer term strategy and shareholding structure, as well as the strengthening of the bank’s franchise, risk controls and management could improve the ratings in the medium term. Fitch also believes that there is a limited probability of state support for SCIB in the longer term, notwithstanding current government ownership. SCIB was nationalized following the country’s 1997 financial crisis, and in 2002, merged with another nationalised bank, Bangkok Metropolitan Bank. The central bank’s Financial Institutions Development Fund (FIDF) still retains a 48% stake, although this is expected to be divested. The bank has nearly 7000 employees and over 400 branches with a 6% market share, as well as affiliates in insurance, securities, asset management and leasing.