Bangkok--21 Dec--Fitch Ratings Fitch Ratings-Bangkok/Hong Kong/Singapore-21 December 2007: Fitch Ratings has today affirmed United Overseas Bank (Thai) Public Company Limited's (UOBT, formerly Bank of Asia) ratings, as follows: Long-term foreign currency Issuer Default Rating (IDR) at 'A-' (A minus) with a Stable Outlook, Short-term foreign currency IDR at 'F2', Individual rating at 'C/D', Support rating at '1', National Long-term rating at 'AA+(tha)' with a Stable Outlook and National Short-term rating at 'F1+(tha)'. UOBT's ratings are based on Singapore-based United Overseas Bank (UOB, 'AA-' (AA minus)/Stable) remaining the controlling shareholder of the bank. While restrictions on foreign ownership may see some dilution of UOB's ownership after 2008, there is flexibility in minimising the impact by strengthening UOBT's capital base, prior to this happening, to a level sufficient for long-term business expansion. Given UOB's reputation, resources and the name association it has with UOBT, Fitch believes there is an extremely high probability that support would be forthcoming, if necessary. Any change in UOB's shareholding in UOBT or its commitment and support to UOBT could affect UOBT's International and National ratings. UOBT reported a net loss of THB521.7 million in 9M07 - a sharp fall from the net profit of THB1.3 billion in 9M06 due mainly to stricter provisioning required by BOT in preparation for IAS 39, loss on sale of NPLs and higher funding costs. Interest income remained flat due to weak loan growth. The bank's operating performance should improve in 2008, with an expected rebound in the domestic economy supported by a cleaner balance sheet. UOBT's Individual rating should also improve with an expected recovery in profitability and growth in the next one to two years. Impaired loans fell to THB7.9bn or 5.5% of total loans, at end-September 2007 from THB18.9bn (12% of total loans) at end-2006, due to the sale of THB10bn in bad loans. Loan loss reserves stood at THB5.3bn and covered 67.1% of impaired loans, in line with its local peers. UOBT's capital is strong, with its Tier 1 ratio at 16.1% of risk-weighted assets and its total capital ratio at 17.5% at end-September 2007. A capital restructure, which was approved by shareholders, to offset the retained losses, together with a small rights issue should see capital remain strong. UOBT was established in 1939 and acquired by Singapore's UOB in 2004. Thailand forms a key market for the parent bank outside of its home base, together with Malaysia, Indonesia and China. UOBT is Thailand's eighth-largest commercial bank, with over 150 branches and 2.5% of system loans and deposits.