Bangkok--19 Sep--TRIS Rating TRIS Rating Co., Ltd. has placed a “CreditAlert” with “negative” implication for the company rating of Small and Medium Enterprise Development Bank of Thailand (SME Bank). The CreditAlert action reflects SME Bank’s financial performance that is weaker than expectation, mainly due to potential contingent liability incurred from penalty charges according to interest rate swap contract, unresolved high non-performing loans (NPL), and internal organization turmoil. These factors are expected to further weaken the bank’s capital fund and financial performance in 2008. Asset quality deterioration and the bank’s weak capital fund to support NPL resolution and business growth under unfavorable economic environment are concerns. SME Bank posted a huge net loss of Bt1,065 million in December 2007 and Bt1,351 million for the first half of 2008. The bank’s NPL ratio was at 45% as of December 2007 and 50% as of June 2008. Recently, the house of representative has approved the recapitalization budget for the fiscal year 2009 worth Bt600 million for the bank. TRIS Rating is now in the process of reviewing the company rating of SME Bank and validating the full impact of the contingent liability incurred from interest rate swap contract and will announce the rating update to the public after the analysis is complete. The current rating of SME Bank is “AA-”. Small and Medium Enterprise Development Bank of Thailand (SME Bank) Company Rating: AA- CreditAlert Designation: Negative