Bangkok--30 Nov--Fitch Ratings
Fitch Ratings (Thailand) has today affirmed Asia Plus Securities Public Company Limited's (ASP) National Long-term rating at 'A-(tha)' with a Stable Outlook and affirmed its National Short-term rating at 'F2(tha)'.
The ratings reflect ASP's strong domestic retail brokerage and investment banking franchise, as well as its solid capital and liquidity positions. ASP depends largely on brokerage revenue, although it is seeking to diversify more into asset management, investment and advisory businesses. While credit and operational risks have remained moderate, market risk has risen due to ASP's increased exposure to proprietary trading. Downside risks to the Stable Outlook could therefore stem from its increasing risk profile.
In 2008, ASP reported net income of THB210.7m, 53% lower y-o-y due to a sharp decline in brokerage fees and lower gain on securities trading tied to weak market performance. The market has recovered strongly since Q209, which has helped improve ASP's performance in 9M09. Net profit rose 85% to THB364.2m, largely driven by strong gains on securities trading. Annualised ROAA rose to 9.9% in 9M09 from 4.4% in 2008, while annualized ROAE increased to 13.3% from 5.9%. Brokerage fees accounted for 61% of total revenues in 9M09.
At end-September 2009, margin loans increased to THB934m, or 25% of equity, from THB470m, or 14% of equity. Impaired receivables declined to THB70m (2.7% of total) at end-September 2009, which appears low. ASP's liquidity has declined moderately, with liquid assets to total assets falling 46% at end-September 2009 from 60% at end-2008, due to strong growth in securities business receivables, although the liquidity ratio remains relatively strong compared to peers. Funding continues to be anchored by equity, given the absence of borrowing in ASP's funding structure, although an M&A opportunity may require the company to raise debt in the future. ASP's capital base is of a high quality, and the Net Capital Ratio (NCR) level remains strong at 182% at end-September 2009. The equity to assets ratio declined to 66% at end-September 2009, from 82% at end-2008, due to strong asset growth.
ASP is Thailand's second-largest securities brokerage company by market share (5.7% in 10M09). Bangkok Bank Public Company Limited (BBL), the largest Thai bank by assets, remains the largest shareholder with an 8.5% stake, although the bank has limited involvement in ASP's business or management. ASP's management holds another 3% stake.
Contacts: Narumol Charnchanavivat/Vincent Milton, Bangkok, Tel: +662 655 4763/4759.
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.
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