TRIS Rating Assigns New Issue Rating of “TCAP” at “A” with “Stable” Outlook

The “stable” outlook reflects the expectation that TBANK, as the major source of revenue for TCAP, will continue to generate stable earnings for the company. In addition, strong financial support and business know-how from both strategic partners -- BNS and TCAP -- will enhance TBANK’s overall business performance. The company’s financial performance is expected to improve in the future. Future growth, both organic and inorganic, through acquisitions or joint venture between TCAP and BNS will be possible. The solid capital base and adequate liquidity is also crucial to help mitigate future downside risks during economic uncertainty.

TRIS Rating reported that on a consolidation and normalized earnings basis (excluding extraordinary incomes from sale of investment in TBANK) as of September 2009, TCAP had total revenues of Bt25,763 million, 42% up from Bt18,098 million as of September 2008. TCAP received 57.4% of total revenue contribution from TBANK, while the other 37.7% was from insurance businesses. The remaining 2.2% was from TCAP’s own operation and asset management companies, including Max Asset Management Co., Ltd. (MAX) and NFS Asset Management Co., Ltd. (NFS-AMC). Revenues from securities and fund management businesses accounted for 2.8% of TCAP’s total revenue. Based on consolidated asset size as of September 2009, TCAP is ranked eighth among all 12 Thai universal banks, with a 4.9% market share in loans and deposits. TCAP has developed a proficient management team that has enabled the company to support the competitive position of its subsidiary and allow TCAP to remain flexible in response to changes in the economic and business environments. The company’s consolidated risk management framework has improved continuously to comply with international standards. However, the economic uncertainty and high competitive environment in the banking industry are expected to limit growth and profitability of TBANK and TCAP over the next one to two years.

TRIS Rating said, TBANK, currently operates under a universal banking license. In July 2007, TCAP signed a joint venture agreement with BNS for the investment in TBANK, changing TBANK’s shareholding structure. TCAP’s shareholding in TBANK was reduced from 99.36% to 74.92% as of 19 July 2007; the balance of 24.98% was held by BNS. On 3 February 2009, TCAP sold additional shares of TBANK to BNS in accordance with the shareholder agreements. The sale covered 416,526,737 shares at Bt18.38 per share (1.6 times book value per share), worth Bt7,656 million. TCAP booked gain from sale of investment for Bt2,800 million. This transaction increased BNS’s shareholding in TBANK up to 48.99% while TCAP held 50.92% of TBANK.

TBANK has a well-balanced revenue base from interest and non-interest income, in line with its universal banking platform. Interest income accounted for 59% of total revenue, mainly from TBANK’s hire purchase business. The insurance businesses contributed the largest portion of non-interest income. Net insurance income for the first nine months of 2009 was amounting to Bt1,396 million or accounted for 18.4% of TCAP’s earnings before taxes. This helps sustain profitability and internally enhance capital base in the long term, said TRIS Rating. -- End

Company Rating: Affirmed at A Issue Ratings: TCAP103A: Bt4,000 million senior debentures due 2010 Affirmed at A TCAP105A: Bt2,500 million senior debentures due 2010 Affirmed at A TCAP11NA: Bt1,500 million senior debentures due 2011 Affirmed at A TCAP14NA: Bt9,000 million senior debentures due 2014 Affirmed at A Up to Bt3,000 million senior debentures due 2013 A Rating Outlook: Stable Copyright 2010, 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.