Bangkok--23 Jan--Fitch Ratings Fitch Ratings has today upgraded the following ratings of TMB Bank Public Company Limited (TMB), as follows: - Long-term foreign currency Issuer Default Rating (IDR) to 'BBB-' (BBB minus) from 'BB+' - Short-term foreign currency IDR to 'F3' from 'B' - Foreign currency subordinated debt rating to 'BB+' from 'BB' - Foreign currency Hybrid Tier 1 issue rating to 'BB-' (BB minus) from 'B' - Individual rating to 'C/D' from 'D' - National Long-term rating to 'A+(tha)' from 'A(tha)' - National subordinated debt to 'A(tha)' from 'A-(tha)' (A minus (tha)) Meanwhile, TMB's Support Rating Floor has been affirmed at 'BB', the Support rating at '3' and National Short-term rating at 'F1(tha)'. At the same time, TMB is removed from Rating Watch Evolving from which it was placed on in October 2007 following the announcement of the capital raising and possible entry of ING Bank NV (ING) as a major shareholder. The Outlook on the Long-term foreign currency IDR is Stable. The rating upgrade is based on the large capital raising of THB 37.7 billion (about USD1.2 bn) completed at the end of December 2007 and the entry of ING (rated 'AA'/'F1+' on an international scale) as the major strategic shareholder in the bank with a 30% stake. While bad loans remain high, the bank now has large loan loss reserves and strong capital buffers to accelerate the clean up of these legacy loans from the 1997 crisis and 2004 merger with Industrial Finance Corporation of Thailand. While the current operating environment remains challenging, the recapitalisation and operational support of ING should see TMB's performance improve markedly over the next one to two years. TMB incurred further large provisions in 4Q, which saw loan loss coverage ratios improve to 70% from 56% the prior year. Given the large losses taken in 2007, it is likely the bank will return to profitability in 2008. This should permit the renewal of coupon payments on its Hybrid Tier 1 in June 2008, hence the 2-notch upgrade to 'BB-' (BB minus). In the longer-term, ING should help strengthen TMB's wholesale and retail banking franchise, bancassurance and asset management, as well as have an immediate impact on its risk management and financial performance. ING now has three representatives on the board of directors, including the chair of the risk management committee. By April 2008, ING will deploy 15-20 staff into the TMB management team. TMB reported a net loss of THB43.7 billion in 2007, due to substantial loan provisions of THB30.9bn and THB10 bn in impaired asset charges to comply with Bank of Thailand (BOT)'s stricter IAS 39, as well as to support the acceleration of non-performing loan (NPL) sales and resolutions, together with goodwill charge of THB12.2bn. While NPLs increased to THB72.4bn or 15% at end-2007 from THB56.1bn or 10% at end-2006 due to more stringent classification, the higher reserve coverage should permit accelerated resolution of these loans in the next two years. Total capital ratio and Tier 1 capital ratio has been restored to a relatively strong 14.4% of risk-weighted assets and 10.7%, respectively, at end-2007. Hybrid Tier 1 accounts for 15% of Tier 1 capital. TMB is Thailand's sixth largest bank with assets of THB622.2bn (about USD19.4bn) and 10% market share. TMB's other key shareholder is Thailand's Ministry of Finance which still holds a 26.1% stake. DBS Bank's stake has been diluted to 6.8%. Contacts: Vincent Milton, Bangkok, +662 655 4759; David Marshall, Hong Kong, +852 2263 9911 Note to Editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(tha)' for National ratings in Thailand. Specific letter grades are not therefore internationally comparable. 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