Bangkok--26 Jun--Fitch's rating Fitch has today affirmed the following ratings of Siam Commercial Bank Public Company Limited (SCB) ratings as follows: - Long-term foreign currency Issuer Default Rating (IDR) at 'BBB+'; - Short-term foreign currency IDR at 'F2'; - Individual rating at 'C'; - Support rating at '2'; - Support Rating Floor at 'BBB-' (BBB minus); - Foreign currency senior unsecured debt and subordinated notes at 'BBB+' and 'BBB', respectively; - National Long-term rating at 'AA(tha)'; - National Short-term rating at 'F1+(tha)'; - National Short-term senior unsecured debt at 'F1+(tha)'; and - National Long-term subordinated debt at 'AA-(tha)' (AA minus (tha)). The Outlook for the bank remains Stable. SCB's ratings reflect the recovery in underlying earnings and profitability on the back of an improvement in asset quality and loan growth. The bank's reserve and capital positions also remain strong. SCB has one of the strongest retail banking franchises in Thailand, with residential mortgages making up 24% and auto loans 9% of its loan book. The ratings also factor in the high probability of government support due to the bank's systemic importance. SCB's foreign currency IDRs are currently capped by the sovereign rating. Fitch views that a further significant decline in impaired and restructured loans and sustained improvement in profitability would be positive for its credit profile. In 2007, SCB's net income increased to THB17.5 billion from THB13.6bn in 2006, driven by strong loan growth (up 16% yoy) and lower provisioning. The bank also reported strong Q1 results, boosted by one-off gains. While overall results for 2008 should remain solid, it faces a challenging economic environment which could see rising funding costs, moderating loan growth and renewed asset quality pressures. In particular, SCB's aggressive loan growth in SME and auto loans (about 40% yoy in 2007) could see a rise in provisioning costs. Impaired loans continued to fall to THB49.7bn or 5.8% of total loans at end-March 2008 from THB54.4bn or 6.3% at end-2007, due largely to the further sale of THB8bn of NPLs. The bank aims to reduce NPLs to below 5% by year-end. In addition, the bank's loan loss reserve coverage of about 80% of NPLs and Tier 1 capital of about 11% remain strong. Basel II implementation could impact capital ratios by about 1.5% by year-end. SCB, established under the Royal Charter in 1904, is Thailand's oldest and third-largest bank with a 14% market share. It has leading subsidiaries in investment banking, fund management and insurance. The Crown Property Bureau and Ministry of Finance each hold about a 24% stake in the bank. Contacts: Darunee Peanmanait, Vincent Milton, Bangkok, +662 655 4752/4759. 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.