TRIS Rating Co., Ltd. has upgraded the ratings of Thanachart Bank PLC (TBANK) and its bills of exchange (B/E) to “A+” from “A”. At the same time, TRIS Rating has assigned a “A” rating to TBANK’s proposed up to Bt5,000 million subordinated debentures. The rating outlook is “stable”. The ratings reflect TBANK’s strong business profile, supported by its management’s capability and experience in its core business, hire purchase, and its enlarged networks and appropriate business platform to strengthen Thanachart Group’s business synergy. The ratings are also enhanced by TBANK’s strong credit profile of its new strategic partner, Bank of Nova Scotia (BNS), Canada, with a 24.98% stake. However, these strengths are constrained by a less than favorable economy and banking business environment, uncertainty in the securities industry, and intensifying competition in the consumer finance industry, which might limit the group’s business expansion and profitability. In addition, the bank’s earnings are expected to experience adverse impact from higher expenses involved in building its own franchise during an expansion period. The “stable” outlook recognizes TBANK’s designated role as the group’s core financial and banking operator. The outlook also takes into account TBANK’s ability to maintain its strong market position in its major business, HP lending. The higher yield of the HP business and driving force for fee income growth are expected to help offset the rising investment in additional branch network during the expansion phase. At the same time, TRIS Rating has also upgraded the company rating of Bank of Ayudhya PLC (BAY) to “A+” from “A” and has upgraded the rating of BAY’s subordinated debentures (BAY13NA) to “A” from “A-” with “positive” outlook. The ratings reflect improved companies profile, solid capital base, strong retail franchise value, and improving risk management, all of which have been enhanced by strategic support from GE Capital Asia Pacific Ltd. (GE), a foreign partner. This should help improve BAY’s business growth and profitability in the medium term. However, the ratings are constrained by the bank’s high legacy non-performing loans (NPL), and a less favorable economic and business environment, all of which might limit business growth and profitability of the bank. The “positive” outlook of BAY reflects the expectation of a substantial improvement in the bank’s financial performance and its asset quality, particularly in profitability. In addition, the bank is expected to gain benefits from synergies with GE in terms of growing profitable assets and market share expansion in consumer banking. The prudent risk management practice to control asset quality is also essential for the bank under loans portfolio expansion period, said TRIS Rating. -- EndThanachart Bank PLC (TBANK)Company Rating: Upgraded to A+ from AIssue Ratings:Bt1,200 million bills of exchange due 2009 Upgraded to A+ from AUp to Bt5,000 million subordinated debentures due 2015 A Rating Outlook: Stable Bank of Ayudhya PLC (BAY)Company Rating: Upgraded to A+ from AIssue Rating:BAY13NA: Bt12,000 million subordinated debentures due 2013 Upgraded to A from A- Rating Outlook: Positive -------------------------------------------------------Copyright 2008, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.