Bangkok--19 Feb--Fitch Ratings Fitch Ratings (Thailand) Limited has today assigned National Long-term ratings of 'A+(tha)' to three tranches of Bank of Ayudhya Public Company Limited's (BAY) unsecured and unsubordinated debentures of up to THB20 billion, due 2010, 2011 and 2012. The Outlook on the bank is Positive. The rating reflects the bank's strong capital position and franchise, together with the operational and financial support of GE Capital International Holdings Corporation (GECIH) which now holds 35% of total shares in the bank. The increasing commitment from GECIH should also bolster the bank's retail banking franchise and help improve the bank's profitability over the medium term. BAY also benefits from GECIH's expertise in global transaction services, technology and operations. BAY reported a net loss of THB4.0bn in 2007, down sharply from a net profit of THB1.7bn in 2006, due to higher provisions in order to comply with more stringent accounting rules IAS39 (amounting to THB12.4bn in 2007 compared with THB11.4bn in 2006), increasing personal expenses, as well as mark-to-market losses on collateralised debt obligation (CDO) investments. BAY's non-performing loans (NPLs) stood at THB70bn, or 15% of total loans at end-2007. Although BAY's loan loss reserve coverage continued to improve to about 50% of NPLs at end-2007 (46% in 2006 and 32% in 2005), this still appears low compared to some of its peers, implying a risk of further provisioning. While BAY does not expect any further large provisioning, the bank now has sufficient capital buffer to absorb a more aggressive clean up of its balance sheet. After capital increases of THB41.4bn in 2007, BAY's total capital ratio and Tier 1 capital ratio rose to 20.3% and 15.6%, respectively. Following the bank's acquisition of GE Capital Auto Lease (GECAL) (which has assets of about THB80bn), these ratios fell to about 17% and 13%, respectively. Additional provisioning and asset growth could see the capital ratios decline further, but the bank should still remain strongly capitalised. Fitch's Positive Outlook on the bank is based on the expectation that strong capital buffers and the expected improvement in Thailand's economic outlook in 2008 should see continued improvement in the bank's performance over the next 12 to 18 months. BAY was established in 1945 and is Thailand's fifth-largest commercial bank, with 567 branches and a 9% market share in lending and deposits. It has affiliates in finance, securities, insurance, fund management, factoring and leasing. Given BAY's relatively large share of deposits and loans, there is a moderate probability of government support, should this be needed. 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