BANGKOK--JAN 26--TRIS
THAIRATINGAND INFORMATION SERVICES (TRIS), ANNOUNCED FRIDAY,26JANUARY1996, THE RATINGS OF THAI THAMRONG FINANCE COMPANY LIMITED(THAITHAMRONG). THAI THAMRONG'S SENIOR DEBT WAS ASSIGNED A "BBB", AND ITS 700 MILLION BAHT SUBORDINATED DEBT ISSUEWASASSIGNEDA"BBB-." THAI THAMRONG'S RATINGS ACKNOWLEDGES THESTRENGTHOFTHE COMPANY'S OWNERS, IMPROVING OPERATINGPERFORMANCE, ONGOING RESTRUCTURING OF ITS LENDING STRATEGYTONEUTRALIZEITSCREDITRISK ANDSATISFACTORY LIQUIDITY. THE RATINGIS CONSTRAINEDBYOPERATIONAL RISKS RELATED TO ITS BRISK EXPANSION STRATEGY, A SIGNIFICANT NUMBER OF NON-PERFORMING LOANS AND RELATIVELY LOW CAPITALIZATION.
THAITHAMRONGISOWNED BY THREE MAJOR FINANCIAL INSTITUTIONGROUPS. AFTER NEW SHAREHOLDERS STEPPED IN DURING MID-1994,THECOMPANYREVIEWEDITS COMPETITIVE POSITION AND DECIDED TO REFOCUS ON SPECIALIZED HIRE-PURCHASE LENDING AND TO INCREASE CORPORATE ACCOUNTS TO DIVERSIFY LOAN PORTFOLIO RISKS. THIS EFFORT STREAMLINED AND IMPROVED OPERATIONS. INTEREST INCOME HAS PROPORTIONATELY INCREASED. DESPITE A DROP IN INTEREST MARGINS BECAUSE OF INCREASING FUNDING COSTS AND TIGHTER LENDING SPREADS, INCOME IS EXPECTED TO BE MAINTAINED ADEQUATELY BASED ON ITS PLANS TO EXPAND HIRE PURCHASE LOANS TO PROVINCIAL CUSTOMERS AND CORPORATE LOANS TO MEDIUM-SIZED COMPANIES IN THE BANGKOK AREA. HIGH NON-PERFORMING ASSETS AND INCREASED OPERATING COSTS ARE MITIGATED BY EFFICIENT FUND MANAGEMENT AND SUFFICIENT QUALITY CONTROL OF PROBLEM LOANS. PARTIAL DISPOSAL OF SHARES IN SCB SECURITIES ALSO ENHANCES ITS SHORT-TERM EARNINGS.
OVERALL ASSET QUALITY HAS IMPROVED CONTINUALLY. THE COMPANY'S NON-ACCRUAL LOANS AT ABOVE 8%, MOSTLY FROM LOANS EXTENDED DURING THE FORMER MANAGEMENT, IS NOTABLY HIGH. LIQUIDITY IS SATISFACTORY AND LESS TIGHT AS A RESULT OF CHANGING FUNDING COMPOSITION TO EMPLOY MORE PUBLIC BORROWINGS, REDUCING ITS LOANS TO PUBLIC BORROWINGS RATIO TO OVER 120%. THE COMPANY'S CURRENT CAPITAL STANDING IS RELATIVELY LOW COMPARED TO PEERS. ITS 7.5% EQUITY TO ASSETS RATIO REPRESENTS A RELATIVELY LOW CAPITALIZATION. SHORT-TERM CAPITAL BUILDING IS PLANNED THROUGH THE ISSUANCE OF 700 MILLION BAHT SUBORDINATED DEBT. IN THE LONGER-TERM, STRENGTHENED SHARE CAPITAL IS CONSIDERED VIA THE CAPITAL MARKET.
NOTE: THAI THAMRONG FINANCE CO., LTD.: TRIS'S RATING ANNOUNCEMENT NO. 49
SENIOR DEBT: BBB
SUBORDINATED DEBT: 700 MILLION BAHT BBB-
END
THAIRATINGAND INFORMATION SERVICES (TRIS), ANNOUNCED FRIDAY,26JANUARY1996, THE RATINGS OF THAI THAMRONG FINANCE COMPANY LIMITED(THAITHAMRONG). THAI THAMRONG'S SENIOR DEBT WAS ASSIGNED A "BBB", AND ITS 700 MILLION BAHT SUBORDINATED DEBT ISSUEWASASSIGNEDA"BBB-." THAI THAMRONG'S RATINGS ACKNOWLEDGES THESTRENGTHOFTHE COMPANY'S OWNERS, IMPROVING OPERATINGPERFORMANCE, ONGOING RESTRUCTURING OF ITS LENDING STRATEGYTONEUTRALIZEITSCREDITRISK ANDSATISFACTORY LIQUIDITY. THE RATINGIS CONSTRAINEDBYOPERATIONAL RISKS RELATED TO ITS BRISK EXPANSION STRATEGY, A SIGNIFICANT NUMBER OF NON-PERFORMING LOANS AND RELATIVELY LOW CAPITALIZATION.
THAITHAMRONGISOWNED BY THREE MAJOR FINANCIAL INSTITUTIONGROUPS. AFTER NEW SHAREHOLDERS STEPPED IN DURING MID-1994,THECOMPANYREVIEWEDITS COMPETITIVE POSITION AND DECIDED TO REFOCUS ON SPECIALIZED HIRE-PURCHASE LENDING AND TO INCREASE CORPORATE ACCOUNTS TO DIVERSIFY LOAN PORTFOLIO RISKS. THIS EFFORT STREAMLINED AND IMPROVED OPERATIONS. INTEREST INCOME HAS PROPORTIONATELY INCREASED. DESPITE A DROP IN INTEREST MARGINS BECAUSE OF INCREASING FUNDING COSTS AND TIGHTER LENDING SPREADS, INCOME IS EXPECTED TO BE MAINTAINED ADEQUATELY BASED ON ITS PLANS TO EXPAND HIRE PURCHASE LOANS TO PROVINCIAL CUSTOMERS AND CORPORATE LOANS TO MEDIUM-SIZED COMPANIES IN THE BANGKOK AREA. HIGH NON-PERFORMING ASSETS AND INCREASED OPERATING COSTS ARE MITIGATED BY EFFICIENT FUND MANAGEMENT AND SUFFICIENT QUALITY CONTROL OF PROBLEM LOANS. PARTIAL DISPOSAL OF SHARES IN SCB SECURITIES ALSO ENHANCES ITS SHORT-TERM EARNINGS.
OVERALL ASSET QUALITY HAS IMPROVED CONTINUALLY. THE COMPANY'S NON-ACCRUAL LOANS AT ABOVE 8%, MOSTLY FROM LOANS EXTENDED DURING THE FORMER MANAGEMENT, IS NOTABLY HIGH. LIQUIDITY IS SATISFACTORY AND LESS TIGHT AS A RESULT OF CHANGING FUNDING COMPOSITION TO EMPLOY MORE PUBLIC BORROWINGS, REDUCING ITS LOANS TO PUBLIC BORROWINGS RATIO TO OVER 120%. THE COMPANY'S CURRENT CAPITAL STANDING IS RELATIVELY LOW COMPARED TO PEERS. ITS 7.5% EQUITY TO ASSETS RATIO REPRESENTS A RELATIVELY LOW CAPITALIZATION. SHORT-TERM CAPITAL BUILDING IS PLANNED THROUGH THE ISSUANCE OF 700 MILLION BAHT SUBORDINATED DEBT. IN THE LONGER-TERM, STRENGTHENED SHARE CAPITAL IS CONSIDERED VIA THE CAPITAL MARKET.
NOTE: THAI THAMRONG FINANCE CO., LTD.: TRIS'S RATING ANNOUNCEMENT NO. 49
SENIOR DEBT: BBB
SUBORDINATED DEBT: 700 MILLION BAHT BBB-
END